Why JPMorgan Chase (JPM) Stock Is Lower

NEW YORK (TheStreet) -- Shares of JPMorgan Chase & Co.  (JPM) are down 1.02% to $57.31 as the bank may have to push through pay cuts and job reductions in its investment bank, due in part to revenue pressures and relatively slow trading conditions, according to CFO Marianne Lake, speaking at an investor conference in New York, the Wall Street Journal reports.

She said the firm could cut compensation if it continues to face short-term revenue pressures but gave no time frame.

Must Read: Warren Buffett's 25 Favorite Growth Stocks

 

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 multiple 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, the net profit margin of 20.99% trails 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 ($5.39 versus $4.32).
  • JPM, with its decline in revenue, slightly underperformed the industry average of 2.9%. 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.
  • Net operating cash flow has decreased to $14,667.00 million or 26.53% when compared to the same quarter last year. Despite a decrease in cash flow JPMORGAN CHASE & CO is still fairing well by exceeding its industry average cash flow growth rate of -42.36%.
  • You can view the full analysis from the report here: JPM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

If you liked this article you might like

Why Apple Pay Cash Won't Be a Venmo Killer: PayPal CEO

Fed Pares $4.5 Trillion Balance Sheet But Easy-Money Era Isn't Over

PayPal Has Billions in Cash and Is On the Prowl for Acquisitions

PayPal Hunting for a Big Deal?

Bank Stocks Move Higher as Fed Decides to Start Unwinding Balance Sheet