Wall Street Analysts Still Sucking Up to JPMorgan Chase

NEW YORK (TheStreet) -- JPMorgan Chase (JPM)'s shares have fallen more than 11% since its stunning disclosure of more than $2 billion in trading losses, so is the stock suddenly cheap or are analysts just afraid to criticize what may still be the most powerful bank in the country?

Analysts have 29 "Buy" recommendations, seven "Hold"s and just one "Sell" on JPMorgan, according to data from Bloomberg. On a Bloomberg proprietary scale of one to five with five being the best, Wall Street analysts rate JPMorgan the highest among the six largest U.S. banks with a score of 4.55. While that is down from its score of 4.65 before the trading loss was disclosed, it is still ahead of runner-up Wells Fargo (WFC), which scores 4.45.

Why are analysts afraid of this man?

Twenty-eight analysts have published research reports in the wake of JPMorgan's announcement on Thursday of the trading losses that JPMorgan CEO Jamie Dimon referred to as "egregious mistakes." Just two of those analysts, Stifel Nicolaus' Christopher Mutascio and FBR Capital Markets' Paul Miller, have downgraded the shares to "neutral" in the wake of the news, while the other 26 have maintained the mostly positive recommendations they had previously, according to Bloomberg data.

"Some guys tell me that I don't get it and I suck as an analyst because I downgraded them! You should see some of the nasty email I got last Friday," Miller wrote via email.

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Sterne Agee's Todd Hagerman argued in a report published Monday that "risks are accelerating for the broker/dealers post the news and accordingly, we see as much as 10-15% further downside risk to group--perhaps more for JPM as the review unfolds, estimates and profits decline, and potential supervisory action becomes a greater risk to the company." Nonetheless, he remained neutral on JPMorgan, maintaining the $50 price target he had before the trading losses were disclosed.

Responding to an email message asking why he didn't downgrade JPMorgan, Hagerman cited his Feb. 29 downgrade of the stock, asking "does it help clients to add to the pain after falling 13% in 2 days? Don't think so. What matters is I was right while 36-38 analysts were very wrong."

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