Why JPMorgan Chase (JPM) Stock May Decline Today

NEW YORK (TheStreet) -- Shares of JPMorgan Chase & Co.  (JPM) may fall today after it was reported that the bank may cut as many as 10,000 more job this year,  the "brutal result of shrinking business and regulators prowling for blood", the New York Post reports.

Additionally, these setbacks are "so stark, they could force CEO Jamie Dimon to throw in the towel, analysts say," the Post adds.

The stock is up slightly in pre-market trade.

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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 few notable 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 increase in stock price during the past year and expanding profit margins. 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 where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 88.15%. Regardless of JPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JPM's net profit margin of 20.99% compares favorably to the industry average.
  • JPMORGAN CHASE & CO's earnings per share declined by 19.5% 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 ($5.50 versus $4.32).
  • JPM, with its decline in revenue, slightly underperformed the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 9.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Commercial Banks industry and the overall market, JPMORGAN CHASE & CO's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: JPM Ratings Report

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