Last night, JP Morgan shocked the world when it had an unexpected conference call where CEO Jamie Dimon discussed a surprise $2 billion trading loss.
JP Morgan shares tanked. The stock is down over 6 per cent right now.
However, Wall Street analysts are beginning to sound off.
Bloomberg reporter Poppy Trowbridge was on On The Move this morning:
This is the view from Goldman. They say “The loss add uncertainty.” Of course it does. But the direct impact to JP morgan shares and profitabiltiy is manageable. They see a decline in profitability of about 5%. And they say the bank is fundamentally intact.
Still, the shares should get support from buybacks and a roughly 3% dividend yield. “Longer term, we continue to recommend the shares as the core earnings power remains intact and the risk/reward balance is favourable at only 7.5 times 2013 earnings per share,” the analysts said. Goldman revised its second-quarter/2012 EPS estimate to $1.03/$4.65 from $1.28/$4.90 and lowered its 12-month price target to $48 on back of a partial price/earnings re-rating.