One of the world’s largest banking institutions in the United States, JP Morgan (JPM), will report their 2nd quarter earnings ending June prior to the open of the New York stock market today. The bank is a leading global financial services firm with assets of $3.1 trillion and operations worldwide. The consensus among analysts is for revenues of $30.23 billion versus $28.3 billion in Q1 2020 and earnings per share (EPS) of $1.15 versus $0.78 in Q1 2020. In the same period a year ago, the company posted earnings of $2.82 a share on sales of $29.6 billion. It reported net income of $9.65 billion.
The forecasts suggest growth of 2.5% on a yearly basis compared to 2Q19, while on the flipside the company is expected to also show a decline in the non-GAAP EPS nearly half in comparison to a year’s ago outcome. This is due to the fact that markets have seen a significant negative impact to JPMorgan’s earnings due to high credit losses due to the pandemic. However JPMorgan’s report today could also be optimistic due to the increased investment banking and trading activity during Q2 of 2020.
The stock has fallen more than 5% since the company reported its Q1 earnings on 14th of April. Currently it is nearly 15.6% lower from the June peak at the $115.00 area and 22.3% from this year’s bottom. The stock has been held well below the year’s peak at the $140 area. Clearly, a better than expected earnings today would suggest that good things are ahead for JPMorgan Chase, and that a beat might be in the cards.
Last week, D.A. Davidson analyst David Konrad upgraded JPMorgan Chase stock to “buy” from “neutral.” He also increased the target price from $102 to $117. According to a report from TheFly, “The company should be the largest beneficiary from the increase in Fed liquidity this quarter that’s driving a very strong bond market and increased risk appetite from investors.” The report also said, “Opportunities in FICC and equity derivatives should see JPMorgan’s combined investment banking and trading revenues north of $10.5B, Konrad adds, also stating that the stock’s pre-provision net revenue multiple of 5.5-times is attractive relative to its peer group.”
