Polini lowered his rating for JPMorgan Chase (JPM) to "Outperform" from "Strong Buy," while cutting his price target for the shares to $46 from $52, and lowering his 2012 earnings estimate to $4.45 a share from $4.70, and his 2013 EPS estimate to $5.10 from $5.48.
JPMorgan's shares closed at $31.99 Tuesday, down 2% year-to-date, following a 20% decline during 2011. The shares trade just below tangible book value, and for six times the consensus 2013 earnings estimate of $5.35. The consensus 2012 EPS estimate is $4.37.
Based on a 30-cent quarterly payout, the shares have a dividend yield of 3.75%.Polini said that although the valuation for JPMorgan's shares is "very attractive, we believe uncertainty related to macroeconomic issues and the [aftermath of the second-quarter hedge trading losses announced on May 10] could undermine strong price appreciation over the near term." The analyst's $46 price target for JPMorgan "is based on JPM trading at about 9.0x our 2013E EPS of $5.10, or in-line with its depressed three-year average P/E multiple of 9.0x, but at a discount to our 15-year industry average (for the nation's 40-largest banks) of 12.5x." Polini said the "discount is warranted given the weak domestic economic recovery and the company's relatively high international exposure." Interested in more on JPMorgan Chase? See TheStreet Ratings' report card for this stock.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV