JP Morgan Chase "buy"

06/15/05 - Banc of America

NEW YORK, June 15 (newratings.com) - Analyst John McDonald of Banc of America Securities maintains his "buy" rating on JP Morgan Chase (JPM). The target price is set to $41.

In a research note published this morning, the analyst mentions that the company has reached an agreement to settle the Enron class action lawsuit (Newby) for $2.2 billion. JP Morgan Chase would take an additional $1.2 billion after-tax or a $0.34 per share charge for the settlement and for increasing its reserves, the analyst says. The size of this additional charge was unexpected, given the existing reserves of $3.6 billion, Banc of America Securities points out. The analyst adds that this settlement removes a major overhang on the company's stock.