More Squawk From Jim Cramer: JPMorgan (JPM) Shows Banks Can Make Money
NEW YORK (TheStreet) -- Shares of JPMorgan (JPM) - Get Report are advancing 2.04% to $64.45 in Thursday afternoon trading after the New York City-based bank reported second-quarter earnings and revenues that topped analysts' estimates.
"It's been a while since we saw trading be as good as it was," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning. "It shows banks have ways to make money."
Many people have pointed out that JPMorgan took out higher reserves against energy loans, but Cramer said he isn't worried about the credit.
Oil and gas prices have rallied during the most recent quarter, with Exxon Mobil (XOM) alone receiving a credit rating downgrade during the period, Cramer explained. Standard & Poors cut the energy giant's credit rating to AA+ from AAA in April.
"I'm saying there is no bankruptcy risk to what that loan is, and if that's the case [JPMorgan is] in good shape," Cramer added.
The results bode well for Wells Fargo (WFC), which reports second-quarter earnings before tomorrow's opening bell, Cramer mentioned in the above video. The bank could announce a share repurchase program in conjunction with "decent" earnings.
He wondered how Wall Street can remain negative when you have a a major bank like JPMorgan, a restaurant chain like Yum! Brands (YUM), the biggest minerals maker in aluminum, and a railroad giant like CSX (CSX) all reporting earnings that indicate that the market is rebounding.
"There is a sense overall that maybe a level of gloom is lifting," he noted. "I mean, that's not substance, but those earnings are substantive."
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.
JPMorgan's strengths such as its expanding profit margins and attractive valuation levels outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: JPM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.