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JPMorgan Chase Embraces Shareholder Friendly Corporate Culture
- Last Friday JPM issued a corporate governance document called "How We Do Business" that outlines 3 changes to compensation policy that are beneficial to shareholders.
- Pay for performance compensation model will reward employees for achievements that are linked with long-term shareholder value and safety and soundness of investment.
- Strong share ownership guidelines and holding requirements for operating executives will ensure management’s focus on creating long-term value.
- A strong clawback policy will hold operating executives accountable for actions that negatively affect business performance in current or future year.
- BofA warned that trading revenues might be down for the fourth quarter and this may spread to other banks such as JPMorgan.
- Banks are telling their clients to take their deposits elsewhere as they are earning next to nothing on their money.
- Highbridge is looking to distance itself from JPMorgan in order to become more competitive as a hedge fund.
- JPM has performed very strongly since recovering from the London Whale incident.
- Considering the headwinds to JPM's business it is incredibly impressive the bank has continued to deliver growth.
- I think JPM is worth $66 right now.
JPMorgan And Goldman Sach's Investment Banking Divisions Are Poised For SuccessLester Goh • Tue, Dec. 16
- Investments banks have been experienced rapid growth within their underwriting and advisory divisions in past years.
- Some have questioned whether this growth is sustainable going forward.
- Looking at key industry drivers, I explain why there is still growth to be realized, and why Goldman and JPMorgan are poised to capitalize on it.
- Low interest rates, high corporate cash balances, corporate confidence, record-high M&A volumes and skyrocketing market valuations will continue to drive the industry further.
Is JPMorgan The Biggest Loser From The Fed's Capital Surcharge Proposal?
- The Fed provided further details regarding their proposal to implement additional capital surcharges for the largest US banks.
- As widely expected, the focus of the proposed surcharge is the perceived reliance of large banks on short-term wholesale funding.
- JPMorgan was singled out in the Fed discussion as the only bank with an estimated capital 'hole' of $22 billion.
- What is so unique about JPMorgan, such that it is the only bank with a capital shortfall?
- The stock appears to be inexpensively valued based on 2015 earnings estimates.
- The dividend is decent and has a lot of room to grow with respect to trailing earnings.
- On a technical basis the stock appears to be exhibiting bullish trends.
ModernGraham Quarterly Valuation Of JPMorgan Chase
- JPM is suitable for both the Defensive Investor and the Enterprising Investor following the ModernGraham approach.
- According to the ModernGraham valuation model, the company is significantly undervalued at the present time.
- The market is implying 2.01% earnings growth over the next 7-10 years, which is significantly less than the rate the company has seen in recent years.
Best S&P 500 Dividend Stocks According To Graham Principles: JPMorgan Chase
- Ranking the top twenty S&P 500 dividend stocks, according to Graham principles.
- Explanation and back-testing of the "All-Stars: Graham" ranking system.
- Description and a buy recommendation for the first-ranked stock of the system: JPMorgan Chase.
JPMorgan Deteriorating: Hold, But Have Finger On The Sell Button
- Earnings quality is not great.
- However, rays of light exist in several divisions and the balance sheet.
- Time will tell if momentum returns, so for now, hold.
Probing Further Into JPMorgan: Strong Results Dampened By Federal Investigation
- JPMorgan is facing a new probe into price-fixing activities in its foreign exchange trading business.
- As a result, JPMorgan upped its potential costs for legal expenses by $1.3 billion and reduced Q3 earnings results.
- Overall, recent results were positive, showing a shift back to profitability.
- We are encouraged by this growth; however, suggest investors also consider peers, such as GS, who are taking to increase transparency and accountability, as well.
- JPM shares have underperformed for the past year, but results are strong, meaning investors can buy a great company at a good price.
- The consumer bank is posting moderate loan growth, the investment bank has top market share, and asset management is growing revenue and expanding margins.
- Shares are now slightly below book value and less than 10x earnings, making now an attractive entry point.
- Throughout 2014 the stock has experienced some really bad news and it is still flat during the past year.
- The dividend has a lot of room to grow with a current payout of just 30%.
- If interest rates begin to rise next year as anticipated, we can see a rise in the share price of the stock.
JPMorgan's Swelling Legal Provisions Did Not Undermine Strong Q3 Performance
- JPMorgan had to spend $1 billion on legal expenses due to forex market rigging investigation but the company still managed to convert its losses over the previous year into profits.
- The company achieved this by playing to its strengths and generating revenue from investment banking, fixed income markets, deposits and credit card sales.
- JPMorgan took pride in its cost cutting measures as it sought to automate to save costs. The company is currently facing competition from tech giant Apple.
- JPMorgan has stood tall over the years and has repaid investors’ faith, does make a worthy investment prospect, if not for the short term then definitely for the long term.
JPMorgan Q3 2014 Earnings: As In-Line As It Can GetWestEnd511 • Wed, Oct. 15
- Headline EPS missed consensus but adj EPS actually came in-line.
- In-line revenue thanks to IB and better than expected loan growth.
- Continue to favor TD and BAC due to lower wholesale exposure and earnings recovery story.
Update: JPMorgan Earnings Miss EPS By $0.03, But Beat Revenues By 2.0%
- JPM missed increased earnings forecasts, but reported progress in core loans, auto origination and investment banking.
- EPS reflects continued improvement and was in-line to slightly positive compared to my forecast.
- Maintain a "Buy" on JPM, especially as 2015 and 2016 earnings forecasts continue to increase.
Whisper Number Impact: What Will JPMorgan's Shares Do Post Earnings?
- The whisper number is $1.37, one cent behind the analysts' estimate.
- JPMorgan has a 74% positive surprise history (having topped the whisper in 37 of the 50 earnings reports for which we have data).
- The overall average post earnings price move is 'opposite' (beat the whisper number and see weakness, miss and see strength) when the company reports earnings.
- JPMorgan Chase is scheduled to report 3Q 2014 earnings before the bell on Tuesday, October 14th.
- Earnings Per Share: The current Street estimate is $1.38 per share (range: $1.30 to $1.50).
- Revenues: The current Street estimate is $23.99 billion, a 0.50% increase from the year-ago period.
JPMorgan Sells Health Savings Account Business To Webster Financial - A Win For BothStock Gazer • Wed, Oct. 1
- WBS and JPM came to an agreement about the purchase and sale of HSA. The deal involves the sale of almost 700,000 accounts to Webster Financial’s HSA Bank division.
- JPMorgan had announced plans of streamlining its business and intended to achieve that goal by selling some of its non-core business units which included the prepaid card business.
- JPMorgan does not expect any adverse effects on its earnings. The company does not anticipate any changes to the revenues and profits it earns because of this deal.
Tue, Oct. 21, 8:49 AM
- At issue are charges of rigging Swiss franc Libor benchmark interest rates, and JPMorgan (NYSE:JPM), UBS, and Credit Suisse (NYSE:CS) will be collectively fined more than $115M, reports Reuters. Not being penalized is RBS thanks to its role as a whistleblower in the case.
- JPMorgan is reportedly set to receive the biggest fine at about $89M.
Tue, Oct. 21, 3:51 AM
- Officials from the FBI and Secret Service have announced that authorities believe the cyber attack on JPMorgan (NYSE:JPM) in August was the work of cybercriminals, ruling out the Russian government as a culprit.
- News reports at the time of the attack suggested that Russia may have been a sponsor of the security breach as retribution for economic sanctions imposed by the U.S.
Fri, Oct. 17, 2:50 PM
- Among the lenders now charging clients who want to park euros with them are Bank of New York Mellon (BK +0.2%), Goldman Sachs (GS +1.8%), and JPMorgan (JPM +1.5%), reports the WSJ. The banks themselves must pay to deposit money with the ECB after it imposed a negative rate on deposits last summer (and then made it more negative last month).
- Next up is HSBC which reportedly will son begin charging customers who deposit more than about €10M, and Credit Suisse (CS +1.1%) is set to do the same.
- Clients most immediately affected are investment firms, but multinationals with sizable European operations may soon face these costs.
Fri, Oct. 17, 8:07 AM
- The talks - which would involve one of the largest real estate complexes for one company in city history and include a large package of incentives - have reached a "feverish" state after nearly falling apart earlier this week, reports the NYT.
- The property at Hudson Yard would include two towers with space equivalent to that of two Empire State Buildings, and be home to 16K employees.
- JPMorgan (NYSE:JPM) - according to sources - had initially sought more than $1B in state and city concessions, and says the benefits to NY would far outweigh that value. “There’s no way that the city would entertain a demand for a billion dollars in additional incentives at Hudson Yards,” says NYC's deputy mayor for economic development.
Wed, Oct. 15, 10:49 AM
- Bank earnings models will no doubt need to be tweaked as the sure thing of higher rates becomes somewhat less sure, with the 10-year U.S. Treasury yield plunging all the way down to 2%, and 30-day Fed Funds futures - just weeks ago pricing in 100% chance of a rate hike by June 2015 - now sees no move until December 2015.
- The XLF is lower by 1.9% and the Regional Banking ETF (NYSEARCA:KRE) is down 2.1% (the S&P 500 is off a mere 1.1%). Among individual names, KeyCorp (KEY -6.4%), First Bancorp (FBP -6.4%), Regions Financial (RF -4%), U.S. Bancorp (USB -2.2%), Fifth Third (FITB -2.6%), Bank of America (BAC -4%), Citigroup (C -3.3%), JPMorgan (JPM -2.8%), Wells Fargo (WFC -1.9%).
- Financial ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
- Life insurers were also waiting on higher rates and they're slipping more than the averages as well. MetLife (MET -3.7%), Prudential (PRU -2.9%), Manulife (MFC -3.5%) Sun Life (SLF -3.4%), Lincoln Financial (LNC -3.9%).
- Insurance ETFs: KIE, IAK, KBWP, KBWI
- Previously: BofA call: Assumption about higher rates not so sure anymore
Tue, Oct. 14, 3:31 PM
- Global growth, foreign-exchange, oil, and small caps are the subject of every client inquiry, says David Kostin. His team's recommendation: Buy "American exceptionalism."
- In Kostin's view, U.S. economy and corporate fundamentals are still strong, with economic growth expected by Goldman economists to be 3.2% next year, the fastest expansion since 2005. Europe is expected to grow just 1%.
- What his team likes are those stocks of companies which have a high proportion of domestic sales, plus sectors like Consumer Staples (XLP -0.1%) and Discretionary (XLY +0.7%) which stand to benefit from lower oil prices (plunging again today).
- As for small caps (IWM +0.9%), Kostin is wary, noting downward earnings revisions have boosted small cap P/E ratios even as prices have declined.
- The list of S&P 500 names capturing two or more of Kostin's themes: GT, GM, PCLN, AMZN, CMCSA, LOW, DG, TSN, ADM, CVS, AVP, WAG, PXD, HAL, JPM, BAC, SCHW, PNC, MS, C, GNW, LNC, MET, THC, AET, UNH, ESRX, HUM, WLP, BIIB, GILD, DAL, CMI, FLR, CRM, JBL, MA, FB, MU, FSLR, VMC, MON, T.
Tue, Oct. 14, 8:58 AM
- A key component of JPMorgan's (NYSE:JPM) outsized legal expense ($1B after-tax, or $0.26 per share), says CFO Marianne Lake on the earnings call, was related to the investigation over foreign-exchange trading, and in other news this morning, JPMorgan's chief currency trader in London has reportedly exited the bank.
- Conference call webcast and presentation slides
- Page 3: Tangible book value per share of $44.13 is up from $39.51 a year ago. Last night's close of $58.16 is 1.32x book.
- Pages 4-7: Overhead ratio of 56% vs. 62% a year ago, number of branches falls to 5,613 rom 5,652, active mobile customers of 18.351M up from 14.993M. Deposit margin of 2.20% falls 12 basis points Y/Y, but net interest income was higher thanks to 9% growth in deposits. Mortgage originations of $21.2B down from $40.5B.
- Page 8: FICC revenue - which had been dropping at double-digit Y/Y rates - turns upward, growing 2% from a year ago.
- Page 10: Asset management net income of $572M up 20% Y/Y. AUM net inflows of $24B.
- Page 12: Firmwide adjusted expenses are expected to be above $58B this year; net charge-offs should be less than $5B - better than previously forecast.
- The Q&A begins momentarily.
- Shares -1.8% premarket
- Previously: JPMorgan: Interest income and FICC gain
Tue, Oct. 14, 7:04 AM
- Q3 net income of $5.6B of $1.36 per share vs. a loss of $400M and $0.17 one year ago. Results include a $1B, or $0.26 per share legal charge. Return on tangible common equity of 13%. Roughly $3B returned to owners in Q3 - $1.5B of repurchases and a $0.40 per share dividend.
- Consumer & Community Banking net income of $2.468B down 9% Y/Y, as the boost to income from lower credit loss provisions comes to and end. This quarter allowed a $200M reduction in loan-loss allowance vs. $1.6B one year ago. Noninterest expense of $6.3B falls 8% Y/Y thanks mostly to mortgage banking staff cuts. Net interest income of $11.4B gains a strong 4% from a year ago.
- Corporate & Investment Bank net income of $1.485B down 34% Y/Y; excluding the DVA, net income fell 40%. Banking revenue of $2.7B fell 6% - investment banking fees grew 2% thanks to strong equity underwriting (up 24%), but debt underwriting fees fell 16%. Markets & Investor Services revenue of $6.1B rises 15% Y/Y, with Fixed Income Markets revenue of $3.5B up 2%, with particularly strong action in currencies and emerging markets.
- Conference call at 8:30 ET
- Source: Press Release
- JPM -0.3% premarket
- Previously: Report: JPMorgan EPS $1.36 vs consensus of $1.39
Tue, Oct. 14, 4:41 AM| 1 Comment
Tue, Oct. 14, 4:32 AM| 2 Comments
Mon, Oct. 13, 5:30 PM
Mon, Oct. 13, 8:00 AM
- When you're a hammer, everything looks like a nail. In what smells like another foray by the Consumer Financial Protection Bureau, with other agencies possibly joining in, banks are reportedly under investigation for lending ... this time for automobiles.
- Amid an otherwise sluggish loan market - especially for mortgages - auto lending has experienced rapid growth over the past few years, particularly subprime lending, and those in that business - Santander Consumer being one - are already under examination by the CFPB.
- At issue for banks is not just the direct auto loans they're making, but the financing they're providing to shops like Santander Consumer.
- Wells Fargo (NYSE:WFC) is the largest U.S. auto lender, with $50.8B in loans outstanding at the end of last year, roughly $15B of which was subprime. In addition, the bank has extended since 2011 more than $1.5B of credit lines to the country's largest subprime lenders. Other sizable players include Capital One (NYSE:COF) and JPMorgan (NYSE:JPM).
- "Banks are making a lot of money off these (auto) loans in many different ways," says the head of a consumer advocate group. Isn't that what they're supposed to do?
- "The subprime auto sector appears too small to present a systemic risk," says BAML's Michael Hanson.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
Fri, Oct. 10, 2:37 PM
- "Steadily improving economic and capital markets backdrop will drive investment banking and loan growth higher, while trading is likely to rebound as the extended period of low volume and volatility is starting to shift back toward more normal conditions in September," say MKM's David Trone and Pankaj Chitrakar, expecting to see earnings for five bulge-bracket banks higher by 11% in Q3.
- The team remains bullish on all five, but sees just four - Citigroup (C -0.9%), Bank of America (BAC +0.5%), Goldman Sachs (GS +0.5%), and Morgan Stanley (MS +0.4%) - beating estimates. JPMorgan (JPM +0.3%) should just meet the $1.38 EPS consensus, they say, with strength in investment banking offset by declining mortgage banking.
Fri, Oct. 10, 12:52 PM
- The banking industry is very close to resolving too big to fail, says Jamie Dimon (JPM +0.6%), speaking publicly for the first time since his cancer diagnosis (other than his July earnings call appearance). He's appearing at a conference roundtable alongside Morgan Stanley's (MS +0.8%) James Gorman, Deutsche's (DB -0.9%) Anshu Jain, and Bank of America's (BAC +0.7%) Brian Moynihan.
- Webcast here
- The most pointed remarks so far come from Deutsche's Jain, who tells those who would continue to further strangle the banks with more regulation to look to Europe. Straightforward banking - taking deposits and making loans - is far more the norm there then here, he says, and the forcing of banks to trim businesses and balance sheets is a large contributor to the Continent's stagnant growth.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KBWC, KRS, FINZ
Fri, Oct. 10, 9:05 AM
- In what would be his first public remarks since JPMorgan's (NYSE:JPM) July earnings call shortly after his cancer diagnosis was disclosed, Jamie Dimon is scheduled to sit in on a panel at the Institute of International Finance conference today, reports the WSJ, citing a source familiar with the bank chief's schedule.
- Dimon finished his scheduled treatments last month and has been ramping up his schedule since. He's expected to host the bank's earnings call on October 14, according to another source.
- Previously: Dimon completes cancer treatments
Fri, Oct. 10, 5:22 AM
- The U.K.'s Financial Services Authority has accused six banks, including JPMorgan (NYSE:JPM) and UBS (NYSE:UBS), of system and control failures in their forex operations, the FT reports.
- The allegations are part of the FSA's investigation into the possible manipulation of currency markets, which is one of a number of probes by authorities around the world.
- Last month, the U.K. regulator started settlement talks with the two banks, as well as with Barclays (NYSE:BCS), Citigroup (NYSE:C), HSBC (NYSE:HSBC) and RBS (NYSE:RBS). The discussions could lead to fines of £1.5B in total.
- By focusing on an inability to stop staff from engaging in misconduct rather than on actual manipulation, the FSA could help the banks limit the impact of lawsuits that have been filed in the U.S. over forex rigging.
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