Will JPMorgan Chase (JPM) Job Cuts Help the Stock Today?

NEW YORK (TheStreet) -- JPMorgan Chase (JPM) shares are down by 0.41% to $66.16, rising slightly from steeper losses in afternoon trading on Thursday as the country's largest bank prepares to cut about 5,000 jobs over the next year, according to the Wall Street Journal.

Declining home-loan volumes and non-virtual customer traffic has forced the bank to begin laying off mortgage workers and tellers, according to the Journal's sources.

The cuts are part of the company's previously announced plan to reduce $4.8 billion in expenses from its consumer and investment banking businesses. 

The company slashed 6,000 jobs during the fiscal year ended March, according to Bloomberg, and has 241,145 employees as of March 31.

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 some important positives, 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 revenue growth, solid stock price performance, growth in earnings per share, increase in net income and good cash flow from operations. 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:

  • JPM's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • JPMORGAN CHASE & CO has improved earnings per share by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, JPMORGAN CHASE & CO increased its bottom line by earning $5.29 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($5.85 versus $5.29).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 12.1% when compared to the same quarter one year prior, going from $5,274.00 million to $5,914.00 million.
  • Net operating cash flow has slightly increased to $14,879.00 million or 1.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -31.79%.
  • You can view the full analysis from the report here: JPM Ratings Report

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