JP Morgan Chase Earnings Preview – First Quarter 2010

JP Morgan Chase [[JPM]] is scheduled to report their first quarter 2010 results before the market opens on Wednesday, April 14.


While many of the financial giants of Wall Street like Citigroup [[C]] and Bank of America [[BAC]] were laid low by the Great Recession, JP Morgan Chase has emerged as the man among boys. JPM has delivered eight consecutive quarterly earnings results that have exceeded Wall Street’s consensus expectations. By way of contrast, Bank of America has only beaten consensus earnings estimates three times in the last ten quarters.  


Recovery in the credit markets is expected to be slow as significant improvement in the job market has yet to appear (despite last month’s favorable employment report). However, credit losses seem to be abating at JPM which should help the financial firm achieve their earnings potential.


In 2009, JP Morgan generated earnings of $12 billion despite the difficult economy. Investors took notice of JPM’s strong quarterly performances, sending their shares up 32% last year. JPM’s strong stock performance has carried over into 2010 as well, with the stock up 10% since the beginning of the year.


The current Wall Street consensus estimates are for revenues of $26.56 billion and EPS of $.64. We at are forecasting better than expected results, with first quarter revenue of $26.66 billion and $.68 EPS.




JP Morgan Chase is now trading at 10x consensus 2011 EPS estimates. This is below the relative valuations of their peer group. JPM stock still appears attractive based on their current valuation levels and the financial stock will undoubtedly benefit from a recovering economy.


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