NEW YORK (TheStreet) -- JPMorgan Chase & Co. (JPM) has reached a long awaited deal to sell about half its stake in the portfolio of its buyout arm, One Equity Partners, sources told the Wall Street Journal.
The bank is planning to announce the sale as early as today, after agreeing to sell part of its stake to investment firms Lexington Partners LP and Carlyle Group LP’s (CG) AlpInvest Partners, sources added.
The deal values the companies JPMorgan is selling at around $2 billion, out of One Equity’s roughly $4.5 billion in investments, sources said.
JPMorgan plans to retain ownership of about half of One Equity’s nearly 30 portfolio companies, and the private equity firm will continue managing those companies, according to sources, the Journal noted.
Shares of JPMorgan are slightly higher in after-hours trading.
TheStreet Ratings team rates JPMORGAN CHASE & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate JPMORGAN CHASE & CO (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. 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:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 14.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 89.61%. 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 22.57% compares favorably to the industry average.
- JPMORGAN CHASE & CO's earnings per share declined by 8.8% 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).
- In its most recent trading session, JPM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- Net operating cash flow has significantly decreased to -$4,371.00 million or 106.37% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, JPMORGAN CHASE & CO has marginally lower results.
- You can view the full analysis from the report here: JPM Ratings Report
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