Evercore Partners reported on Friday that it has lowered estimates on JPMorgan Chase & Co (JPM
The firm has cut estimates on JPM ahead of the third quarter earnings. Analyst Andrew Marquardt maintained an “Overweight” rating and $61 price target on JPM. This price target suggests a 15% upside from the stock’s current price of $51.94.
The analyst noted: “We expect JPM to report core 3Q13 EPS of $1.40, $0.15 above consensus EPS est of $1.25 (consensus may incl legal costs, DVA losses which we exclude from core) and below 2Q13 core EPS of $1.57.”
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“On a reported basis we expect 3Q13 EPS of $0.99 , incl est’d $0.37/shr drag from non-core legal costs, $0.04 DVA drag. Overall 3Q results exp’d lower vs 2Q on seasonally weaker capital mrkts and TSS rev’s and slowing mrtg, partly offset by lower expenses, better AQ, and capital build likely (though AOCI hit from higher rates and add’l litigation accruals are wildcards).”
“While some settlements annc’d in 3Q13 ($1.7b total cost for CIO/FERC/cards/collections) according to press reports JPM in discussion w/ regulators re ~$11b settlement that could cover a majority of outstanding issues/inquiries incl FHFA MBS suit (we est JPM’s potential FHFA exposure ~$6.5b), though responsibility for WaMu losses may be a sticking point. Settlement could potentially incl $7b in penalties and $4b in homeowner relief,” added the analyst.
Looking ahead, the firm has lowered third quarter estimates from $1.42 to $1.40 per share. FY2013 estimates have been cut from $5.88 to $5.84 per share, while FY2014 and FY2015 estimates have remained unchanged at $5.75 and $6.12 per share, respectively.
JPMorgan shares were mostly flat during pre-market trading Friday. The stock is up 18% YTD.
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