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Deutsche Bank Rats Out, Then Cuts JPMorgan

O'Connor said that his 2013 earnings estimate of $5.00 a share for JPMorgan "is now 10% lower than pre-CIO trading losses," reflecting "the elimination of earnings related to macro hedges, some de-risking of the securities book, modest market share losses in the core trading business and less share buybacks," which "are partially offset by tighter cost controls, higher mortgage and lower loan loss reserves."

Dimon said during JPMorgan Chase's second-quarter conference call that "hopefully, if all goes well, we can start buying back stock early in the fourth quarter," resuming the share buyback program that was suspended in May after the CIO hedge trading losses were first disclosed.

O'Connor said that Deutsche Bank has become "increasingly concerned" that "EPS expectations may be too high," and that "capital deployment may disappoint," since Federal Reserve "approval for meaningful buybacks in 4Q12/1Q13 is unlikely."

Deutsche Bank's price target for JPMorgan Chase is $40.00.

Interested in more JPMorgan Chase? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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