Goldman Sachs: JP Morgan's CIO Loss Already in the Past

Goldman Sachs has published a research report on JP Morgan (NYSE: JPM) after the company reported an earnings beat despite recent popularity over controversial decisions made within the firm.

In the report, Goldman Sachs writes, "JPM reported 2Q12 earnings of $1.21, which we estimate to be $1.02 on a core basis (vs. comparable consensus of $0.76), $1.59 when also excluding $4.4bn in losses in the CIO unit offset by $1bn of securities gains and $1.22 when excluding reserve release. We expect the stock to respond favorably with the CIO loss largely behind it coupled with statements around reinstating the buyback in 4Q12. We expect this mornings earnings call to focus on (1) how the initial CIO position grew so large, (2) changes in risk-management since then, and (3) implications for the future of the CIO unit and near-term capital deployment potential. We maintain our CL-Buy with our EPS estimates and price target under review pending the conference call."

Goldman Sachs maintains its CL-Buy rating on JP Morgan, which closed yesterday at $34.04.

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