If anyone is having a good day today, JPMorgan Chase (
NYSE:JPM) is definitely on that list. New reports give the company some very favorable outlooks as multiple key measures deliver value for the company and its shareholders alike. “Firing on all cylinders” is a great report to have, and for right now, that's how JPMorgan seems to be running.
Everything Is Awesome
It may be tough to believe, but the news out of JPMorgan is pretty much great across the line. Not only did the company turn in results that beat Street expectations in both revenue and earnings, but it also turned in positive results that suggest this is not a temporary win.
The company brought in $3.79 per share in earnings, which is well above the Refinitiv consensus estimate of $2.62. Revenue was also a beat, as the company was expected to bring in $28.7 billion this quarter, but ended up bringing in $30.16 billion in revenue. The company cited gains in trading revenue as well as investment banking operations as two of its biggest drivers.
Less often cited, but still providing extra help to the bottom line, was the release of reserves held against the potential of bad loans. The credit-reserve releases, as they were called, meant an extra $0.72 per share in earnings. A little quick-and-dirty math shows just how good the results were for JPMorgan Chase; even without that gain, the company still would have handily beat earnings estimates by nearly $0.40 per share.
The Analysts Are Running With Chase
Those results might well suggest a course of action in their own right, and you can rest assured—based on our latest research—that you will be no maverick by following that course. JPMorgan Chase has held a consensus rating of “buy” for the last six months, and done so under ratios that have been improving lately.
Six months ago, the company had nine “hold” ratings and 13 “buy” ratings to its credit. Today, things are a little more bearish, but with a lot of bull energy running as well; it's added two “sell” ratings to the fold, but “hold” ratings are down to six and “buy” ratings are up to 18. It's not quite as good a ratio as it was three months ago, when it was one “sell”, five “hold” and 17 “buy”, but it's still quite solidly in favor of buying in.
The price target, meanwhile, has been trending upward for the last three months after a slip between three and six months ago. Six months ago, the company was at $112.04, which slipped to $111.59 three months ago. The company recovered to $113.89 before hitting current levels at $121.51. Moreover, for the first time in six months, the consensus price target is actually a downside reflection; the company is currently trading at $137.87. 2021 is moving alone nicely for JPMorgan Chase, with several analysts upgrading price targets and overall ratings in just the last two weeks.
Win if You Do, Win if You Don't
The best part about this report is that it doesn't really show any immediate signs of weakness. Despite the fact that economic conditions have changed, and frantically, between January 2020 and January 2021, JPMorgan Chase is still set up to do well. It would take a complete implosion of the markets as we know them to really hurt JPMorgan, as that would cripple the company's trading and investment banking operations. We've seen JPMorgan do well in good times and in bad times, a point that often really only requires different strategies to succeed. A company that can survive the coronavirus, and the various government reactions to same, is a strong company. A company that can so clearly succeed therein is a whole different matter, and JPMorgan has done just that.
Granted, JPMorgan's results got a little extra goose from some technical matters—the release of reserves definitely helped—but as we saw from the numbers already stated, the reserve release didn't actually make or break the company's figures. All the release did was spike a ball that had already clearly passed the goal line. We'd still be talking about how great a quarter JPMorgan had even without that move, which makes me wonder if perhaps some of those reserves should have been kept in reserve against future need.
Still, this was a fantastic quarter, and there's little sign that next quarter won't look at least as sound, comparably, to this one. There are potential speed bumps ahead, like future Federal Reserve postures and issues connected to trading, but for at least the near-term, a JPMorgan Chase investment should produce solid returns for investors.
Companies in This Article:
