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Unformatted text preview: Market Edge Research Equity Research Report JPMORGAN CHASE & CO SELL JPM-$37.86 Exchange:NYSE June 23, 2008 Recommendation Opinion SELL Opinion Date 6/23/2008 Current Price 37.86 Opinion Price 37.86 Prior Opinion HOLD Summary: JPMs weak fundamental outlook is being matched by the poor price performance of the stock. The stock appears to be favorably valued when compared to other stocks in its industry group. JPM's management seems to be doing an adequate job of managing its operations efficiently so as to ensure future earnings growth when compared to industry averages. The companys balance sheet is sound but it needs to be careful regarding its debt ratios. Operating margins declined last quarter and operating cash flow has been irregular. Demand for the companys products and services needs to show improvement as sales for the last quarter declined -9.23% to $26.76 billion. Looking forward, the analyst consensus forecast for net revenue and earnings for the next two quarters are expected to slow versus the prior quarter. The stocks recent price momentum is negative and it has been underperforming the market when compared to the S&P 500. In order for the stock to show any significant price improvement, the company must strengthen its financial performance and regain investor's confidence. Business Description: JPMorgan Chase & Co., a financial holding company, provides a range of financial services worldwide. The company operates through six segments: Investment Bank, Retail Financial Services, Card Services, Commercial Banking, Treasury and Securities Services, and Asset Management. Economic Sector: Financial Industry: Fin'l Div. Number of Employees: 180,667 Share Information 52-Week Range: $36.01-50.48 Market Capitalization: $134,777 mil Common Shares Outstanding: 3,427 mil Number of Institutional Shareholders: 2,964 Shares Held By Institutions: 2,393 mil % Held By Institutions: 68.79% Dividend: $1.52 Dividend Yield: 3.84% Last Stock Split 3 for 2 Last Split Date: 6/12/2000 Book Value Per Share: $36.89 EPS Estimate 2008: $2.91 EPS Estimate 2009: $3.77 P/E on Estimate 2008: 13.01 P/E on Estimate 2009: 10.04 JPMORGAN CHASE & CO Pg. 1 Analysis Quarter EPS 2008 2007 2006 Q1 0.68 1.35 0.85 Q2 E0.67 1.20 0.98 Q3 E0.75 0.97 0.90 Q4 E0.83 0.86 1.09 Year E2.91 4.38 3.82 Annual EPS $ Yr. Over Yr....
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- Spring '08