Cramer says Wells Fargo is a hostage to the net interest margin and, after the employment number, the bank will not see the yield curve it wants. Cramer expects J.P. Morgan CEO Jamie Dimon to go on the offensive because Dimon might think the company's days of litigation are behind it; as a result, he expects Dimon to stark talking about returning capital.
Cramer says this could be an important fulcrum quarter for J.P. Morgan, and if Dimon goes on the offensive, then the stock could rise.
He also said Bank of America (BAC) is still his favorite of the three banks, and would recommend it as a buy if the company reported earnings this week.
Separately, TheStreet Ratings team rates JPMORGAN CHASE & CO as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate JPMORGAN CHASE & CO (JPM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and attractive valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, JPM's share price has jumped by 29.47%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, JPM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 90.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.09% is above that of the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.1%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- JPMORGAN CHASE & CO's earnings per share declined by 6.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, JPMORGAN CHASE & CO reported lower earnings of $4.32 versus $5.19 in the prior year. This year, the market expects an improvement in earnings ($5.90 versus $4.32).
- You can view the full analysis from the report here: JPM Ratings Report