JP Morgan Chase "neutral weight"

12/12/03 - Prudential Financial

NEW YORK, December 12 (New Ratings) — Analyst Michael L Mayo of Prudential Financial issues a "neutral weight" rating on JP Morgan Chase (JPM), while raising his estimates for the company. The target price is set to $34.

Shares of JP Morgan Chase, a leading investment and financial services company, are currently trading at $34.67.

According to Prudential Financial’s research note published yesterday, JP Morgan Chase is poised for a significant improvement in its assets quality by the next year. The analyst mentions that the company’s stabilizing margins and continued cost savings are likely to boost its earnings growth in 2004. Moreover, Prudential Financial expects JP Morgan Chase to resume its share buyback activities next year.

JP Morgan Chase’s increased commercial credit releases are likely to considerably reduce its credit expenses in the current quarter, the analyst says. Prudential Financial expresses its optimism regarding the company’s improved consumer loans and investment management revenue gains in 4Q03. However, the analyst expects JP Morgan Chase’s mortgage origination volumes to remain sluggish in the near term.

The EPS estimates for 2003 and 2004 have been raised from $3.00 to $3.10 and from $3.15 to $3.25, respectively. The P/E estimates for 2003 and 2004 are 11.2x and 10.7x, respectively.

Prudential Financial issues a "neutral weight" rating on JP Morgan Chase.