Banking, finance, and taxes

Will JPMorgan Set the Tone for Bank Earnings?

BrianAJackson / iStock

JPMorgan Chase & Co. (NYSE: JPM) is scheduled to release its fourth-quarter financial results before the markets open on Tuesday. This is one of the major banks reporting this week. So far we’ve already seen Citigroup post a win.

Thomson Reuters has consensus estimates calling for $2.25 in earnings per share (EPS) and $27.28 billion in revenue from JPMorgan. The same period of last year reportedly had $1.76 in EPS and $25.45 billion in revenue.

This mega bank blew out expectations in 2017, with shares returning almost 24%, when analysts were originally expecting a −1.1% return. But CEO Jamie Dimon and his team’s share price dropped by 8.7% in 2018, to close at $97.62 apiece.

The current consensus price target of $120.07 was far higher than the consensus target of $104.23 from a year earlier. And the 3.3% juiced-up dividend yield would imply a total return of 26.3%, if the pool of analysts is proven to be correct.

JPMorgan is currently the largest bank by market cap, with its $335 billion valuation. It also has a 3.3% dividend yield, and Dimon would prefer to keep raising that yield as long as the regulators will allow. With a total of roughly $240 billion in total debt maturities on the books, JPMorgan has some $73 billion maturing by 2021, and that is listed as follows: $132 billion in 2019, $23.9 billion in 2020 and roughly $46 billion in 2021.

Last quarter, even Warren Buffett and Berkshire Hathaway became a big buyer of JPMorgan shares.

Here’s what a few analysts said ahead of the report:

  • Morgan Stanley has an Overweight rating and a $124 price target.
  • Barclays has an Overweight rating with a $140 price target.
  • Jefferies has a Hold rating.
  • Wells Fargo has a Buy rating.

Shares of JPMorgan were last seen up about 1% at $100.75, in a 52-week range of $91.11 to $119.33. The stock has a consensus analyst price target of $120.07.

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