Good morning. Here’s your daily equity research roundup from the Street.
J.P. Morgan and Wells Fargo (JPM, WFC): Goldman Sachs analyst Richard Ramsden is reiterating his Buy rating on both JPM and WFC after the banks reported earnings last Friday, writing, “JPM and WFC screen as not only having the best earnings visibility, but as having some of the highest returns even accounting for fully-phased Basel III capital ratios. We expect both banks to continue deploying excess capital, leading to meaningful effective yields and for shares to move higher as the disconnect between returns/yields and current valuation narrows.”
Procter & Gamble (PG): UBS analyst Nik Modi reiterates his Neutral rating on PG but is cautious about potential management changes ahead, writing, “the one conclusion we keep coming back to is P&G’s competition is likely to benefit from internal distraction/disruption at P&G over the coming quarters–something we think is already plaguing the company as a result of its restructuring efforts. A likely sharper focus on profitability would only strengthen our case.”
General Electric (GE): Morgan Stanley analyst Nigel Cole downgrades GE to equal-weight from overweight due to valuation, writing, “We move to the sidelines for now in light of recent outperformance and GE’s premium valuation ex- GECC. We continue to view GE as an attractive cycle and cash story, but key catalysts (gas orders, OM inflection) are likely 2013 events.”