Back to top

Analyst Blog

On Mar 4, 2013, we reiterated our long-term recommendation on JPMorgan Chase & Co. (JPM - Analyst Report) at Neutral. This reflects the company’s strong fourth-quarter results, which significantly surpassed the Zacks Consensus Estimate.

Why Neutral?

JPMorgan’s fourth-quarter earnings came in at $1.39 per share, significantly surpassing the Zacks Consensus Estimate of $1.20. Better-than-expected results were primarily driven by improved revenues and a slowdown in provision for credit losses, marginally offset by higher non-interest expenses.

Following the fourth-quarter results, the Zacks Consensus Estimate for 2013 has gone up 2.1% to $5.41 per share. Likewise, the Zacks Consensus Estimate for 2014 has also advanced (up 2.7% to $5.78 per share). With the Zacks Consensus Estimates for both 2013 and 2014 increasing, the company now has a Zacks Rank #3 (Hold).

The key reasons behind JPMorgan’s stable earnings in midst of the ongoing sluggish economic recovery is its business diversification. The spread of its portfolio may prove to be as much of a positive during the recovery as it was during the downturn. Also, JPMorgan will be able to leverage its strong deposit base when interest rates finally rise.

Yet JPMorgan’s top-line growth is expected to slow down in the next few quarters, owing to weak trading revenue and net interest margin contraction. Moreover, with the thrust of new banking regulations, there will be a pressure on fees and loan growth is likely to remain weak.

Other Major Banks Worth Considering

While we prefer JPMorgan, other major banks worth a look include BankUnited, Inc. (BKU - Analyst Report), Fifth Third Bancorp (FITB - Analyst Report) and State Street Corporation (STT - Analyst Report). While the first stock carry a Zacks Rank #1 (Strong Buy), other two retain a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%