UPDATE: ISI Group Reiterates Buy, $52 PT on JP Morgan; Discount Overdone
ISI Group remains rated Buy with a price target of $52 on JP Morgan (NYSE: JPM) as it believes the market is discounting risks too heavily.
ISI Group says, "[I]n a scenario where 1) the office of the CIO no longer makes any earnings, 2) a stringent Volcker Rule causes the long-term ROE of JPM's investment bank to be only 10% (down from 17% over the past 5 quarters), and 3) JPM stops recapturing loan loss reserves, we estimate its current EPS power would still be $4.00. The stock is now just 8.4x that level (which admittedly does not include the impact of the trading loss)."
JPM closed at $33.49 on Friday.
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