Earnings Preview: J.P. Morgan

by: theflyonthewall.com October 14, 2008 | about stocks: JPM    

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J.P. Morgan (JPM) is expected to report Q3 earnings before market open Wednesday, October 15, with a conference call scheduled for 9 a.m.

Guidance

Analysts are looking for EPS of (13c) on revenue of $16.21B. The consensus range for EPS is (70c) to 42c, while the consensus range for revenue is $14.13B to $18.27B, according to First Call.

Analyst VIews

Two research firms had very different outlooks on the firm recently. Bernstein believes that J.P. Morgan's strong capital and reserves provide investors with protection. The firm does not forecast that J.P. Morgan's results will be encouraging, but it thinks the bank will gain market share and improve its overall position once a recovery takes hold. Bernstein reiterated its Outperform rating on the stock. On the other hand,

Oppenheimer reduced its Q3 EPS estimate for J.P. Morgan to (27c) from 21c, citing deteriorating credit conditions. Oppenheimer maintained their Market Perform rating on the stock. Of course, J.P. Morgan shareholders will try to ascertain tomorrow whether most of the bank's write-downs are behind it, and how well-capitalized it is at this point. Investors will also want to know how Washington Mutual (WM) , which J.P. Morgan bought last month, will affect the firm. Bernstein has predicted that the acquisition will significantly increase the bank's earnings power.

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This article has 3 comments:

  •  
    Oct 14 02:36 PM
    Well... They don't need to worry about anything, do they? The power of the U.S. Government is squarely behind them. No free market concerns here...
    Reply | Link to Comment
  •  
    Oct 14 05:31 PM
    Correction. JPM didn't really purchase Washington Mutual. Its assets were seized by the FDIC and the bank was essentially gifted to JPM for a pittance.

    It is nice to know that Bernstein believes this "acquisition"... (theft?) will significantly enhance JPM's earnings. Apparently, WM was a pot of gold.

    FDIC and Treasury are you listening? WM's shareholders are waiting for compensation.
    Reply | Link to Comment
  •  
    Oct 14 08:38 PM
    The bank that manages Bank of Baghdad (funneling of no-bid contracts, war spoils, petrodollars) will never be allowed to fail by US Government for fear of embarrassing details and proof of illegal practices released.

    Insolvent and buried under CDS's ($90 trillion) JPMorgan may be, it has powerful forces backstopping it.
    Reply | Link to Comment
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