JP Morgan Chase Earnings Preview: Second Quarter 2011

JP Morgan Chase is scheduled to report their second quarter 2011 results before the market opens on Thursday, July 14, 2011. Based on our analysis, we at are expecting JP Morgan to report better than expected quarterly results that will exceed Wall Street’s consensus expectations.


Earnings Analysis

Last quarter, JP Morgan reported strong earnings results to start 2011. They even gave investors a big dividend increase. JPM remains the elite bank on Wall Street and the only firm that has consistently delivered strong results. We are expecting CEO Jamie Dimon to report financial results that are above consensus estimates.


Analyst Expectations

We are forecasting revenues of $25.6 billion and EPS of $1.32. This would represent earnings growth of 21 percent from last year’s $1.09 per share in the same period. The current analyst consensus estimates calls for revenues of $2.70 billion and EPS of $1.22.


Stock Performance

Since the beginning of 2011, JPM’s stock price has declined 4 percent and has underperformed the 9 percent gain in the Dow Jones industrial average.  



JP Morgan Chase stock is trading at a valuation of 7x consensus 2012 EPS estimates. JPM shares have fallen significantly over the past three months and currently offer investors an attractive entry point with a potential 20 percent upside.


Recommendation: Buy with an $48 price target

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