NEW YORK (TheStreet) - JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. Report Chairman and CEO Jamie Dimon is meeting with Attorney General Eric Holder on Thursday to negotiate a settlement for numerous charges against the bank.
JPMorgan could be liable to pay $11 billion, of which $7 billion will be in cash and $4 billion in consumer relief. The rumored amount is significantly less than the previously speculated $20 billion.
It is uncertain which of the charges laid against JPMorgan will be dissolved in this round of negotiations.
Jim Cramer, in a column on the Real Money subscription service, says JPMorgan has to play this carefully to ensure it doesn't mortgage its future. "JPMorgan needs a deal that is so clean, that is so preemptive that you can't ever expect the Justice Department or a State Attorney General to file suit on old mortgages again," he says.
Despite the uncertainty, JPMorgan shares are 0.29% higher to $51.85 as of 10:55 a.m. EST. Overall, the bank is leading the S&P 500 which is up 0.2%.
TheStreet Ratings team rates JPMorgan Chase as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate JPMorgan Chase a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Since the same quarter one year prior, revenues rose by 10%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 63.2% to $68,520 million when compared to the same quarter last year.
- The net income increased by 31% when compared to the same quarter one year prior, rising from $4,960 million to $6,496 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization.
- Compared to where it was trading one year ago, JPM is up 27.6% to its most recent closing price of 52.75. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.
- You can view the full analysis from the report here: JPM Ratings Report
Written by Keris Alison Lahiff.