NEW YORK (TheStreet) -- In a letter to shareholders JPMorgan CEO Jamie Dimon defended the size and business model of his company, the largest U.S.-based bank, which Reuters reports has been facing criticism calling the company too big and too complicated. Dimon said the company is "not a conglomerate" and that its size does "not necessarily" make it more risky. Shares of JPMorgan are up by 0.29% to $61.23 at the start of trading on Thursday morning. He would go on to talk about the Fed's plan, which was revealed in December, that would require big banks to hold onto more capital in order to protect against losses. In early January a Goldman Sachs analyst report stated that as a result JPMorgan may be worth more if it were broken up, Reuters added. In his letter Dimon would go on to say that JPMorgan operates using the same three basic businesses as regional U.S. banks, consumer banking, commercial banking, and asset management, adding that the company has one additional unit, its global corporate and investment bank, Reuters noted. "Our mix of businesses works for clients and for shareholders," Dimon said, adding that "Large does not necessarily mean complex." Additionally, Dimon would write that last year's volatility in U.S. Treasuries was a "warning shot" to investors and that the next financial crisis could be made worse by a shortage of the securities, Bloomberg reports. Dimon called the Treasuries move "an event that is supposed to happen only once in every 3 billion years or so," adding that a crisis in the future will be worse because there "is a greatly reduced supply of Treasuries to go around." Separately, TheStreet Ratings team rates JPMORGAN CHASE & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation: "We rate JPMORGAN CHASE & CO (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: Net operating cash flow has significantly increased by 504.41% to $28,746.00 million when compared to the same quarter last year. In addition, JPMORGAN CHASE & CO has also vastly surpassed the industry average cash flow growth rate of 294.60%. The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 88.82%. Regardless of JPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JPM's net profit margin of 20.20% significantly outperformed against the industry. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, JPMORGAN CHASE & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500. JPMORGAN CHASE & CO's earnings per share declined by 8.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JPMORGAN CHASE & CO increased its bottom line by earning $5.29 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($5.80 versus $5.29). JPM, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. You can view the full analysis from the report here: JPM Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
Click to view a price quote on JPM. Click to research the Banking industry.
from Latest TSC Headlines http://ift.tt/1yYvxS8
No comments:
Post a Comment