JPMorgan Upgraded On Improved Lending Prospects

NEW YORK (TheStreet) -- JPMorgan Chase  (JPM) got an upgrade from Societe Generale analyst Murali Gopal Monday, who cited expected loan growth acceleration among other factors in lifting his recommendation to "buy" from "hold".

JPMorgan shares were up 0.1% to $56.7 in early trading Monday, while shares of Bank of America  (BAC) and Citigroup  (C) were down slightly and Wells Fargo (WFC) shares were up by 0.3%.

In addition to citing the potential for increased loan growth, Gopal noted "acceleration in the resolution of mortgage litigation," with some $23 billion in total settlements since the third quarter of 2013. The observation about mortgage settlements appears stale, however, since the JPMorgan settlements dominated headlines for several weeks and are now no longer on anyone's mind.

Gopal also sees a positive in that JPMorgan's balance sheet appears positioned to benefit from rising interest rates, particularly short-term interest rates. This is kind of meaningless since  bank balance sheets are so complicated its very tough to know how they are positioned and my personal feeling is short term rates will stay where they are for at least another year.

Finally, Gopal noted JPMorgan has relatively little exposure to emerging markets. Indeed that relative lack of exposure has prevented it from suffering the selloff seen by Citigroup in recent weeks. But of course an emerging markets rebound wouldn't benefit the bank much either.

Gopal became the 32nd analyst who recommends JPMorgan shares to investors, versus nine who have a "hold" rating and two with "sells." JPMorgan is a perennial analyst favorite.

JPM Chart data by YCharts

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