What to Expect From JPMorgan Earnings

This bank has been fighting calls to break itself into pieces. Legal expenses have weighed on shares and low interest rates and lack of volatility have weighed on revenues. New capital requirements have also pinched profits. It will be interesting to see how JPMorgan will handle earnings while carrying all this weight.

In March, JPMorgan was given Fed approval, for its 2015 capital plan. The fortress balance sheet owner is increasing its dividend to $0.44 per share from $0.40, and the banking giant will also repurchase of up to $6.4 billion of common equity between April 1, 2015, and June 30, 2016.

Following the banking crisis in 2009, JPMorgan slashed its dividend to a measly $0.05 from $0.38. It took roughly two years for the banking giant to raise the dividend to $0.25 in 2011. The next year, the dividend was increased again to $0.30, and then the following year to $0.38. It was not until July of 2014 that the dividend passed the $0.38 mark, from back in 2009, to $0.40.

24/7 Wall St. has collected a few analyst calls ahead of JPMorgan earnings:

• Sanford Bernstein upgraded JPMorgan to an Outperform rating up from Market Perform and raised its price target to $70 from $67
• Oppenheimer had an Outperform rating and raised its price target to $79 from $74
• Credit Suisse reiterated an Outperform rating

This stock joins the Credit Suisse U.S. Focus List and is one of the top banks to buy now on Wall Street. The stock trades at a solid 10.8 times estimated 2015 earnings. The company, like most of the top money center banks, is expected to benefit from commercial loan growth and an upturn in capital spending. Wall Street analysts agree that the stock seems attractively valued on 2015 estimated price-to-earnings ratio and a very solid price-to-book value. Some on Wall Street have cautioned that last year’s divestiture of the physical commodities business could provide an earnings headwind this year.

Improvement in loan growth, terrific equity capital markets and a steady increase in deposits will be a solid plus. Trading at a discount to many of the large cap banks on 2015 earnings estimates helps upside potential as well.

Shares of JP Morgan were up 0.7% at $62.15. The consensus price target is $69.09, and the 52-week trading range is $52.97 to $63.49.

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