"JPM will be able to work through a lot of issues over the next 12 months, and as they emerge from under that cloud, their valuation should better reflect their current profitability and returns, instead of the headline risk that is pressuring the stock today."
JPMorgan's shares trade for for 1.3 times tangible book value, according to Thomson Reuters Bank Insight, and for 8.5 times the consensus 2014 earnings estimate of $6.10 a share. The consensus 2015 EPS estimate is $6.42.
JPMorgan was recently included among TheStreet's Cheapest Bank Stocks, based on consensus 2015 earnings estimates.
"Their return on tangible common equity exceeds their cost of equity by five percentage points," According to Mosby. "And that given that level of profitability, they should be trading at twice the premium to tangible book value that they do today," he says.Mosby rates JPMorgan Chase a "buy," with a price target of $66.00. Rafferty Capital Markets analyst Richard Bove colorfully described the SEC's leak about the investigation of JPMorgan's hiring practices in China as "part of the program" with the agency "acting on orders" from above. "In fact, it is believed that there are 8 U.S. government agencies seeking ways to harm that company along with some states and even two foreign governments," Bove wrote in a note on Monday. Taking the SEC's apparent selective application of the Corrupt Foreign Practices Act to JPMorgan, Bove took the matter to its logical, albeit ludicrous, conclusion. "[I]f the SEC pursues an action against the bank here and prevails, it will be establishing a standard that all American companies will not be allowed to hire the most educated and best trained people in any emerging country outside the United States. If the SEC prevails it would make it necessary for that entity to investigate hundreds of companies operating outside the United States and thousands operating in this country," he wrote. Bove added, "everyone knows that the SEC is not about to do that" Bove rates JPMorgan a "buy," with a price target of $62.50. JPM data by YCharts
Interested in more on JPMorgan Chase? See TheStreet Ratings' report card for this stock.
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