This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

JPMorgan CFO Change Helps Put Whale In Rear View

Stocks in this article: JPM

The company reported on Nov. 8 that after submitting a revised capital plan to the Federal Reserve, the company was approved to buy back up to $3 billion in shares during the first quarter of 2013.

Hawken's "Buy" rating for JPMorgan Chase was unchanged, along with his price target of $46, which represents 13% upside to the closing price on Monday of $40.59.

After the Federal Reserve released the economic scenarios it would use for its next round of stress tests to be completed in March 2013, KBW analyst Frederick Cannon estimated that JPMorgan would increase the quarterly dividend by 10 cents to 40 cents, while buying back a total of $12.4 billion in common shares during 2013. This would be quite a significant capital return, especially in light of the company's efforts to improve its risk management this year.

JPMorgan's already have an attractive dividend yield of 2.96% based on the 30-cent dividend. If Canon's estimate proves to be accurate, the dividend yield would be 3.94%, based on Monday's closing price. That is quite a significant bit of income for yield-hungry investors in the prolonged low-rate environment.

Preventing another "London Whale."

Citigroup analyst Keith Horowitz on Tuesday, following a meeting with the company's new Co-Chief Operating Officer and Operating Committee member Matthew Zames, said that "one clear takeaway from the meeting is investors remain concerned about risk management and lack the ability to 'trust' that JPM is not harboring other unseen risks."

According to Horowitz, "Zames emphasized JPM's renewed commitment to 'empower' independent risk managers in the CIO, increase transparency, and hold the Corporate segment to more rigorous standards that have long been in place in the Investment Bank." Horowitz said that his firm believed that "the failure in the CIO was simply an oversight due to lack of focus," and that although it was "a painful and costly mistake, lessons have been learned, processes have been rectified, and the CIO operation will be very differently managed going forward."

"Despite the large size of JPM's balance sheet, we believe management has their arms around key risks, and ironically after this issue now have greater confidence in JPM relative to peers," Horowitz said.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs