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What to Expect from JPMorgan Chase’s Q2 Earnings

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On July 10, JPMorgan Chase (NYSE:JPM) stock rose 5.5% and closed at $96.27. The stock was trading 31.8% below its 52-week high of $141.10. Meanwhile, the stock was trading 25.2% above its 52-week low of $76.91. At the closing price on July 10, JPMorgan Chase stock had a market capitalization of $293.3 billion.

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What can investors expect from JPMorgan Chase’s second-quarter results? The company will likely report its earnings results for the June ended quarter on Tuesday before the market opens. 

JPMorgan Chase’s Q2 earnings expectation

Wall Street analysts expect JPMorgan Chase to post sales of $30.3 billion in the second quarter. The estimate represents growth of 2.5% YoY (year-over-year) compared to $29.6 billion in the second quarter of 2019. Also, analysts expect the company to post a non-GAAP EPS of $1.04 in the second quarter. The non-GAP EPS was $2.51 in the second quarter of 2019.

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Investors expect a significant hit to JPMorgan’s earnings in the second quarter as the company makes a higher provision for credit losses. On the flip side, the company will likely report higher fee income due to increased investment banking and trading activity. 

Analysts also expect JPMorgan Chase’s revenues to fall by 4.5% YoY in 2020 to $113.4 billion. The sales will likely rise by 0.5% YoY in 2021 to $113.9 billion. The adjusted earnings will likely fall by about 50.7% YoY in 2020 to $5.29 per share. However, the profits will likely rise 67.1% YoY to $8.84 per share in 2021.

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Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) will also likely report their earnings results for the second quarter on Tuesday. Goldman Sachs (NYSE:GS) should report its results on Wednesday, followed by Bank of America (NYSE:BAC) on Thursday. Wall Street analysts expect most of the banks to report significant loan loss provisions in the second quarter due to the economic meltdown. 

Analysts’ recommendations and target price

Among the 27 analysts covering JPMorgan Chase stock, 16 recommend a “buy,” ten recommend a “hold,” and one recommends a “sell.” Currently, analysts have a target price of $112.72 on the stock. On July 10, the stock was trading at a discount of 17.1% to analysts’ target price. The consensus target price for the stock has risen from $108.90 in June—a growth of 3.5%.

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Last week, D.A. Davidson analyst David Konrad upgraded JPMorgan Chase stock to “buy” from “neutral.” He also increased the target price from $102 to $117. According to a report from TheFly, “The company should be the largest beneficiary from the increase in Fed liquidity this quarter that’s driving a very strong bond market and increased risk appetite from investors.”

The report also said, “Opportunities in FICC and equity derivatives should see JPMorgan’s combined investment banking and trading revenues north of $10.5B, Konrad adds, also stating that the stock’s pre-provision net revenue multiple of 5.5-times is attractive relative to its peer group.”  

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Stock returns

Based on the closing price on July 10, JPMorgan Chase stock was trading 0.3% above its 20-day moving average of $96.02. The stock is trading 0.4% above its 50-day moving average of $95.87 and 1.7% below its 100-day moving average of $97.94. JPMorgan’s 14-day relative strength index number is 50, which suggests that the stock isn’t overbought or oversold.

JPMorgan stock has an upper Bollinger Band level of $102.35, while its lower Bollinger Band level is $89.69. On July 10, the stock closed near its middle Bollinger Band level of $96.02, which suggests that the stock is neutral.

To learn more, read Jamie Dimon on JPMorgan Chase: Stock Is ‘Very Valuable’ and Why George Soros Sold Most of His Financial Stocks.

Stay tuned to learn how JPMorgan Chase performed in the second quarter.

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