A Higher Multiple Ahead?
Oppenheimer analyst Chris Kotowski on Wednesday said in a report that there was a change in tone at Tuesday's Investor Day meetings from previous years. "There always seemed to be a cadre of attendees whose questions seemed to betray a view that surely the industry was just kicking the can down the road and was in reality surely on the precipice of calamity," he wrote. At this year's Investor Day, the negative tone "was replaced by ticky-tack fine grain detailed questions about cost saves, branch builds, corporate culture and the like," Kotowski wrote. JPM CEO James Dimon made it clear that the company was focused on becoming more efficient, and said that major acquisitions were "pretty much off the table." The bank has a goal of $1 billion in annual cost savings, through various efficiency improvements and the elimination of roughly 4,000 jobs. Kotowski called the items JPMorgan focused on during Investor Day, "boring stuff that probably bespeaks a likelihood of higher multiples." The analyst rates JPMorgan "outperform," with a 12-18 month price target of $64.00, estimating the company will earn $6.02 a share this year, with EPS rising to $6.50 in 2014. "JPM remains our favorite name in the group at this juncture as we cannot normally find this kind of quality at 8x our estimate (or 9x consensus)," he wrote.