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How The Street Is Reacting To JPMorgan's Earnings

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How The Street Is Reacting To JPMorgan's Earnings

JPMorgan Chase & Co. (NYSE: JPM) on Tuesday reported its second quarter results which were stronger than expected.

Here is how Wall Street is reacting to the print so far.

RBC: Consumer And Community Banking Results ‘Strong'

Gerard Cassidy of RBC Capital Markets commented in a note that JPMorgan's outperformance relative to expectations were driven by stronger Consumer & Community Banking Performance and Corporate & Investment Bank performance due to lower expenses.

Cassidy also noted that other major business lines were "weaker" while an unspecified loss item on their held-for-sale assets in its asset management division also impacted results.

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Bottom line, the quarter was "generally strong" and the outlook for loan growth remains "positive." The company is also making "headway" on reducing expenses and simplifying its businesses.

Shares are rated with a "Neutral Sentiment Indicator."

SocGen: Core Trends ‘Positive'

Murali Gopal of Societe Generale commented that JPMorgan's second quarter was positive. Trading revenues were "weak" but core trends were "positive" and driven by 12 percent year-over-year loan growth.

Gopal also commented that JPMorgan's 58 percent expense ratio was two percentage points lower than consensus estimates and should be a "positive consensus driver going forward."

Shares remain Buy rated with an unchanged $71 price target.

Compass Point: Gain On Sale Margins Better Than Expected

Kevin Barker of Compass Point Research & Trading commented that JPMorgan's gain on sale margins were better than expected although this could be due to higher interest rate locks, which the company does not report.

Barker also noted that the fair value markup in the MSR was "very strong" and similar markups should be observed for most banks. In addition, the 19 percent increase in originations was "much better" than what leading industry forecasts have for the quarter.

In terms of trading and investment banking, the decrease in trading revenue "has been expected" and is actually in-line with what has been seen on average over the past two years.

Barker's research note showed no rating and price target.

Latest Ratings for JPM

DateFirmActionFromTo
Nov 2019MaintainsOverweight
Oct 2019MaintainsOverweight
Oct 2019MaintainsBuy

View More Analyst Ratings for JPM
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Posted-In: banks Compass Point Research Gerard Cassidy JPMorgan Kevin BarkerAnalyst Color Analyst Ratings Trading Ideas Best of Benzinga

 

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