"Ongoing litigation expenses, higher regulatory costs, and a weak macro economic backdrop limited the company's ability to grow earnings and book value at a meaningful rate over the course of the year," says FBR's Paul Miller, reiterating his Market Perform rating on JPMorgan (JPM +1.7%) following yesterday's Q4 results. "We expect more of the same in 2014, as loan growth expectations remain tepid, margins hold steady, and one-time expenses continue to weigh on earnings."
Miller argues this limited earnings potential "warrants a modest discount" vs. JPM's "more benign regional peers."
Jefferies' Ken Usdin, on the other hand, reiterates a Buy rating on the stock and $66 price target, saying "a more upbeat I-baking and trading outlook offsets a slightly higher starting point for expenses. JPM remains the cheapest of the universals ... we believe it can regain multiple as legal/environmental issues subside, earnings become cleaner, and core business results continue to outperform."
JPMorgan Q4 earnings coverage
Earlier: Miller reiterates a Buy rating on Wells Fargo