With fourth-quarter earnings out and the majority of financial crisis-era lawsuits in the past, analysts have begun to reassess several of the United States’ largest financial institutions.
JPMorgan Chase (NYSE:JPM): Current Price $47.01
In some respects JPMorgan Chase had a rough 2012. Since August the bank’s stock has trailed behind global banks by 30 percent, and even more concerning it chalked up a $6.2 billion trading loss earlier in the year and was fined $4.3 billion by federal and state prosecutors for mortgage-related abuses. However, despite these setbacks, JPMorgan was able to post record profits for 2012, generating $21.3 billion in net income last year.
These earnings drew the notice of analysts at Deutsche Bank, as did the bank’s diminishing mortgage business. The team of analysts led by Matthew O’Connor wrote in a research note seen by Bloomberg that JPMorgan’s annual operating expenses could drop by as much as $5 billion in the next few years, partly because its mortgage servicing costs will decrease.
O’Connor upgraded the shares of the financial institution to buy from hold and increased the 12-month price target to $53 from $48. “We think JPM is the best-positioned market-sensitive bank for a pickup in consumer loan growth,” he wrote.