J.P. Morgan shares gain for a second straight session on Tuesday, fourth-quarter earnings fall short of estimates, bond trading revenue shrinks

January 16, 2019 10:55 am

J.P. Morgan Chase & Co’s (JPM) fourth-quarter profit, reported on Tuesday, fell short of Wall Street estimates, as a drop in bond trading revenue and an increase in expenditures weighed.

J.P. Morgan Chase shares closed higher for a second consecutive trading session in New York on Tuesday. The stock went up 0.73% ($0.74) to $101.68, after touching an intraday high at $102.47, or a price level not seen since December 12th ($102.90).

Shares of J.P. Morgan Chase & Co have risen 4.16% so far in 2019 compared with a 4.13% gain for the benchmark index, S&P 500 (SPX).

In 2018, J.P. Morgan’s stock retreated 8.72%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

The bank reported a 4.1% year-on-year surge in total revenue to $26.80 billion during the fourth quarter, which missed the median analyst estimate of $26.83 billion.

Adjusted fixed income trading revenue, however, shrank 18% year-on-year due to investors’ exit from commodities and credit trading markets as a result of volatility spikes at the end of last year.

Revenue from equities trading grew 2% year-on-year during the past quarter, supported by strength in prime brokerage serving hedge fund clientèle.

J.P. Morgan’s revenue from its investment banking business went up 3% year-on-year due to a surge in advisory fees, while underwriting fees dropped.

At the same time, the bank’s expenditures increased 6% year-on-year during the past quarter due to investments in technology, marketing as well as real estate.

Meanwhile, net income attributable to shareholders soared 67% year-on-year to $7.07 billion (or $1.98 per share) during the fourth quarter. In comparison, analysts on average had expected earnings of $2.20 per share.

The Wall Street bank also said that its net interest income had risen 9% year-on-year to $14.5 billion during the latest quarter, as US interest rates surged last year.

According to CNN Money, the 27 analysts, offering 12-month forecasts regarding J.P. Morgan Chase & Co’s stock price, have a median target of $121.00, with a high estimate of $140.00 and a low estimate of $104.00. The median estimate represents a 19.00% upside compared to the closing price of $101.68 on January 15th.

The same media also reported that 14 out of 29 surveyed investment analysts had rated J.P. Morgan Chase & Co’s stock as “Buy”, while 12 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for J.P. Morgan Chase & Co (JPM) are presented as follows:

Central Pivot Point – $100.23
R1 – $101.50
R2 – $103.10
R3 – $104.37
R4 – $105.65

S1 – $98.63
S2 – $97.36
S3 – $95.76
S4 – $94.17

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