Q4 Preview: J.P. Morgan (JPM) Sees Headwinds But Should Meet Lowered Expectations


J.P. Morgan ( JPM ) is slightly higher today, ahead of the company's fourth quarter earnings release, expected out before the market opens tomorrow. Shares are up0.03% in afternoon trading.

JPM is expected to report EPS of $0.99 with revs of $24.44 billion. Last quarter, the New York, NY-based firm reported EPS of $1.01 on revs of $23.824 billion, mixed to the consensus. Looking at Q409, we see than JPM produced a loss of $0.28 and negative revs, largely driven by markdowns.

Notably, the revs outlook for Q410 is 8.8% lower than in Q409.

Shares of the company gained 9.4% through the quarter, to $42.37 at the end of December. The stock is up 5.3% since the end of the quarter, and ended 2010 relatively flat.

JPM shares are currently trading for a forward P/E of 9.7x FY11 EPS estimates, relatively cheap when compared to 10.1x for Bank of America ( BAC ), 11.1x at Citi ( C ) and 11.6x at Wells Fargo ( WFC ).

Data from Bloomberg has 27 analysts with a Buy on JPM, 6 with a hold, and none suggesting to Sell. The analyst price target average is $53, with a high of $60 and low of $44.

Keefe, Bruyette & Woods believes that JPM will produce strong revs from corporate finance, but those will be offset by lower trading volumes and widening credit spreads at international counterparties.

KBW is looking for EPS of $0.90. They have an Outperform rating with a $57 price target.

Earlier in the week, Barclays said that they expect sound Q410 results from "4Q10 results benefitting from solid investment banking fees, lower mortgage repurchase costs, and ongoing reserve release."

JPMorgan Chase & Co. is expected to release their Q410 earnings on Friday, January 14, 2011, at approximately 7:00am EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: BAC , C , JPM , WFC



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