Jim Cramer -- JPMorgan's Rally Into Earnings Is a Concern

Cramer is concerned about the 'big rally' shares of JPMorgan have experienced over the past few days leading into earnings.
By Bret Kenwell ,

Earnings season is under way and the financial stocks are up next. Specifically, JPMorgan (JPM) - Get Report is set to report earnings Thursday morning.

The stock has had a "big run" already, which is somewhat of a concern for TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio. Although the stock is down Wednesday, shares are still up over 5% from one week ago.

It would be more attractive if the stock was near $58 or $59, Cramer said from the floor of the New York Stock Exchange. Currently, shares are trading just over $63.

CEO Jamie Dimon will likely be bullish on the conference call and management will likely tell investors how a more volatile investing environment will be beneficial to JPMorgan, Cramer said.

What the bank really needs though is higher net-interest margins. While the figure likely improved during the quarter, a higher NIM - a direct result of higher interest rates - is what's really needed for these stocks to move higher, he reasoned.

Investors don't need the bank stocks to trade higher during earnings - they only need to get through the bank earnings over the next few days. In other words, Cramer is looking forward to the earnings results of other companies next week.

"Other stocks next week will be better," Cramer concluded.

Analysts expect JPMorgan to earn $1.43 per share on $24.16 billion in revenue.

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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