JP Morgan Earnings Preview

The safest bank on Wall Street is expected to report another solid quarter despite the recent economic challenges.


JP Morgan Chase [[JPM]] is scheduled to report their second quarter 2010 results before the market opens on Thursday, July 15.


CEO Jamie Dimon commented in April that while the economic outlook is still challenging, “there have been clear and broad-based improvements in underlying trends.” In recent weeks, JPM shares have been under pressure as investors weigh concerns over JPM’s exposure to BP [[BP]] and the pending financial reform bill.


JP Morgan has an impressive track record of delivering better than anticipated earnings results in each of the past nine quarters. Last quarter, the banking giant reported earnings results that were $.10 above Wall Street’s consensus estimates. JPM shares jumped 4.1% following the better than expected earnings results.


The current Wall Street consensus estimates are for revenues of $25.96 billion and EPS of $.72. This would imply a 6% decline in revenues over last year’s $27.71 billion. However, analysts expect profits at JPM to jump significantly from last year’s $.28 per share. 


In 2010, JP Morgan’s shares have fallen 8% and have underperformed their peers like Bank of America [[BAC]] and Citigroup [[C]]. However, JPM has outperformed Goldman Sachs [[GS]] and Morgan Stanley [[MS]]. Last year JPM shares gained 32% and easily outpaced the 19% gain in the Dow Jones index.


JP Morgan stock is currently trading at 8x consensus 2011 EPS estimates. JP Morgan Chase is regarded as the safest of the Wall Street firms and is expected to significantly increase their dividend next year.

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