JPMorgan Chase (JPM) Stock Declines After Revelation of DOJ Criminal Probe

NEW YORK (TheStreet) -- JPMorgan Chase & Co. (JPM) shares are down 1.4% to $60 in trading on Tuesday after the financial firm announced that it was subject to a criminal investigation into its foreign exchange business by the Justice Department.

The financial holding company said that it is cooperating with investigators who include the Commodity Futures Trading Commission and the U.K. Financial Conduct Authority.

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Watch the video below for more on the criminal probe into JP Morgan's foreign exchange business:

JPMorgan, which has faced numerous investigations and fines since the recession and financial collapse of 2008, said that the "reasonably possible losses" the company could incur due to fines resulting from the investigation could reach as high as $5.9 billion, an increase from the $4.6 billion the company estimated in August.

TheStreet has in depth coverage of the announcement here.

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 revenue growth, increase in stock price during the past year, compelling growth in net income, impressive record of earnings per share growth and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.0%. Since the same quarter one year prior, revenues slightly increased by 2.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 1566.3% when compared to the same quarter one year prior, rising from -$380.00 million to $5,572.00 million.
  • JPMORGAN CHASE & CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in 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).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, JPMORGAN CHASE & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: JPM Ratings Report
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