By Karen Schwartz
Analysts have upped their targets on JPMorgan Chase (JPM) following its fourth-quarter results. The bank reported earnings that topped analyst expectations at $4.8 billion — $1.12 per share -- on revenue of $26.1 billion. On average, analysts we tracked expect JPM shares to gain about 21 percent over the next 12 months.
“Five of the six businesses are showing improvements,” Rochdale Securities’ Richard Bove told Bloomberg. “The revenue momentum is positive.”
Out of 17 sell-side and independent analysts who have updated their recommendations since the results, 15 are positive and two are neutral. None are negative. The median 12-month price target of these analysts is $53, up from $52 a month ago, while the median is $54.50, compared with Thursday’s close of $44.75.
Current 12-month price targets of selected sell-side and independent analysts. Click to enlarge.
Bernstein’s John McDonald has the highest target at $64, followed by Oppenheimer’s Chris Kotowski at $63. At the other end of the scale, both Nomura’s Glenn Schorr and Richard Staite of Atlantic Equities have a Neutral rating and $50 target.
Meredith Whitney Advisory Group’s Meredith Whitney put a $54 price target on the stock, which she upgraded to Buy from Hold. Her Q1 EPS is now $1.12, up from $1.06, as reported by StreetInsider.com.
FBR’s (FBCM) Paul Miller, per Dividend.com, lifted the price target for the bank this week to $53 from $45 and reiterated his “Outperform” rating on JPM. “Overall, JPM’s solid quarter enforces our thesis that the larger banks’ relatively diverse earnings streams will protect them from various overhangs, compared to regional peers.”
Morningstar (MORN) Stock Analyst Notes’ Jaime Peters writes that “while the firm is still burdene with several problems related to the credit crisis, we expect its earnings to continue to rise throughout the next year.”
The New York Times reports that Barclays Capital’s (BCS) Jason Goldberg is in the camp that sees the potential for dividend increases on the horizon.“We do think dividend increases are in the cards for some,” he said. “JPMorgan will be in that grouping.”
Many hope its results herald a better year for banks overall, and see it as leading the way. Mike Mayo of Credit Agricole (OTCPK:CRARY) tells Daily Finance that the bank “has gained market share in each of its six businesses, maintained higher capital and better technology and shown more consistency with strategy and management.”
Institutional Risk Analytics’ Christopher Whalen, who upgraded the bank from neutral from negative, tells HousingWire that results “are superficially strong, but dependent on the continued aggressive posture of management with respect to reserves and future losses.”
Reduced trading activity resulting from greater risk aversion among clients remains an issue for big banks. “It’s been a running theme for these banks for several quarters now,” says Rochdale’s Bove. “Is the industry undergoing a structural change with reduced trading, or is this just a function of inactivity and people unwilling to trade?”