JPMorgan Analysis: Dow Earnings

BOSTON (TheStreet) -- JPMorgan Chase (JPM) has reported quarterly results.

Quarterly Synopsis: JPMorgan's fourth-quarter net income increased 47% to $4.8 billion. Earnings per share stretched 51% to $1.12. The investment bank finished 2010 ranked No. 1 for global fees, generating $1.5 billion of profit in the fourth quarter, a 21% year-over-year decline. The retail unit swung to a profit of $708 million from a year-earlier loss of $399 million. Mortgage-banking profit more than doubled, signaling that beleaguered businesses continue to improve. Real estate portfolios suffered a net loss of $877 million, a notable improvement to the $1.7 billion deficit reported a year earlier. Card services swung to a profit of $1.3 billion from a year-earlier loss of $306 million. All core businesses demonstrated strength.

Earnings Performance: JPMorgan's adjusted earnings tally of $1.12, an 83% year-over-year increase, exceeded analysts' consensus target by 12%. But, JPMorgan has an average earnings beat average of 38%. The bank's nearly $24 billion of sales missed the consensus estimate by 1.9%. By comparison, JPMorgan has an average sales beat rate of 1.8%. In addition to strong income statement and cash flow figures, JPMorgan continued to strengthen its balance sheet during the fourth quarter. Its Tier I Common Ratio clocked in at 9.8% and its Tier III ratio was 7%. The bank held $33 billion of credit reserves, with a loan loss coverage ratio of 4.5% of total loans.

Dividend Information: JPMorgan's quarterly dividend has fallen from a high of 38 cents, last paid in 2009. Currently, it pays five cents a quarter, translating to an annual yield of 0.5%. The dividend has fallen 49% a year, on average, over a three-year span and 32% a year, on average, over a five-year span. Analysts forecast that the dividend will double in 2011.

Analyst Opinions: Currently, 27 researchers, or 82% of those in coverage, advocate purchasing JPMorgan's stock and six recommend holding it. None advise selling the shares. JPMorgan ranks as the second highest-rated Dow stock on an aggregate basis, behind Coke ( KO). The stock has a median 12-month price target of $53.27.

Barclays, Overweight, $60 Target
Credit Suisse, Outperform, $58 Target
KBW, Outperform, $57 Target
Deutsche Bank, Buy, $52 Target
Goldman Sachs, Buy, $51 Target
Citigroup, Buy, $48 Target
Blockbuster Timeline

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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