Market Overview

An Early Reaction To JPMorgan's Q3 Earnings

Share:
An Early Reaction To JPMorgan's Q3 Earnings

Big banks kicked off third-quarter earnings season Tuesday with JPMorgan Chase & Co.'s (NYSE: JPM) "typical" beat, according to BofA Securities.

The JPMorgan Analyst: Erika Najarian maintains a Neutral rating on JPMorgan with an unchanged $114 price target.

The JPMorgan Thesis: The bulk of JPMorgan's EPS beat can be attributed to a $611-million provision versus expectations of $2.8 billion, while fees contributed to the revenue beat, Najarian said in a note.

Core expenses — excluding any outsized legal expenses — were inline with expectations at $16.4 billion, the analyst said. 

Related Link: Bank Results Solid On Day 1 Of Earnings Season, And Focus Now Turns To Amazon Prime Day, Apple Event

Despite the headline beat, it remains unclear if banks have fully recovered, she said.

On one hand, EPS tripled versus the bank's second-quarter results, but the bottom line results were "clearly" boosted by a $600-million reserve release, Najarian said.

Spread revenues of $13.2 billion missed estimates of $13.5 billion.

While consumer credit losses were down on a year-over-year and quarter-over-quarter basis, early stage and late-stage delinquencies were both "fairly stable" in the quarter, the analyst said.

Elsewhere, trading results exceeded expectations, while corporate and investment bank results came in better than JPMorgan's own estimate, she said. 

"We think the stock's performance may hinge on management's view on the pace of the recovery and the path to normalized ROE, and whether we've hit a bottom in spread revenues," Najarian said. 

JPM Price Action: Shares of JPMorgan were trading lower by 1.44% Tuesday afternoon at $100.96. 

Photo by M.O. Stevens via Wikimedia.

Latest Ratings for JPM

DateFirmActionFromTo
Nov 2020Keefe, Bruyette & WoodsDowngradesOutperformMarket Perform
Oct 2020Credit SuisseMaintainsOutperform
Sep 2020Independent ResearchUpgradesHoldBuy

View More Analyst Ratings for JPM
View the Latest Analyst Ratings

 

Related Articles (JPM)

View Comments and Join the Discussion!

Posted-In: bank earnings banksAnalyst Color Earnings News Price Target Reiteration Analyst Ratings

Latest Ratings

StockFirmActionPT
PLTHCanaccord GenuityMaintains6.0
VLDRCraig-HallumInitiates Coverage On23.0
MFACNorthland Capital MarketsInitiates Coverage On15.0
CEREJefferiesInitiates Coverage On18.0
GIIIUBSInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com