JPMorgan Chase (NYSE:JPM) is set to release FQ4'2013 earnings before the market opens on Tuesday, January 14th. Last year JPM, the largest bank in the US, was hit with a record breaking $13b fine and took it in stride to end probes from regulators over its mortgage backed securities sales. This huge fine was a means of retribution by the federal government, a way of collecting damages for the trouble JPM and the banks caused in 2008. Since the bailout, JPM has squirreled away years of extremely high profits, to them this $13b fine wasn't even that big of a deal. If you looked at the company's stock performance from 2013, you had never have guessed anything was wrong.
The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for JPM to report $1.27 EPS and $23.600B revenue, while the current Estimize consensus from 34 Buy Side and Independent contributing analysts is $1.27 EPS and $23.677B revenue.
JPMorgan Chase has beaten the Wall Street and Estimize profit consensus in each quarter over the past year. In each of these quarters the Estimize consensus from Buy-side and Independent contributing analysts has been more optimistic than Wall Street, but still has not been high enough. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing very little difference between the consensuses.
The distribution of estimates published by analysts on Estimize range from $1.06 to $1.44 EPS and $23.300B to $24.317B in revenues. This quarter we're seeing a wider distribution of estimates on earnings, but an average sized one for revenues. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa.
Over the past 4 months we have seen negative analyst revisions, especially at the very end of the quarter. The timeliness of estimates is correlated with accuracy, so these recent revisions are a good indicator that JPMorgan Chase will likely not report numbers as high analysts were expecting 4 months ago.
The analyst with the highest estimate confidence rating this quarter is Analyst_7718081 who projects $1.33 EPS and $23.758B in revenue. Estimate confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case our highest rated analyst is making a bullish call expecting JPMorgan Chase to beat the Street on both profit and revenue.
Throughout the past 8 quarters JPM has met or exceeded the Wall Street profit consensus 7 times. Despite beating the Street by a wide margin in each of the past 5 quarters, this quarter Estimize contributing analysts are expecting JPM to report very much in line with the Wall Street consensus on Tuesday.