JPMorgan Chase (JPM) — This global financial services company has assets of nearly $2.5 trillion and operates in over 50 countries. Although earnings for 2013 fell to $4.35 per share versus $5.20 the year before, S&P has increased its estimate for 2014 to $6.04 from $5.96. And it estimates 2015 earnings will increase to $6.40.
Increased earnings are expected to result from an expanding capital markets business that should benefit from a European recovery, a strong asset management business, and expanding income from its U.S. branch network. S&P said it anticipates JPM will increase its share-repurchase program and quarterly dividend, which currently stands at $0.38, for a 2.7% yield. Its analysts have a 12-month fundamental price target of $65.
Technically, JPM broke from a consolidation in May to form a new bull channel. The 200-day moving average and the support line of the bull channel continue to frame the price structure.
Buying volume increased in November and December, and the stock broke to a new high. But profit-taking and a difficult month for stocks in January drove it to support, where it reversed.
I last recommended JPM on Feb. 14, with the stock near $58, and now at roughly the same price, I wish to reiterate that recommendation. JPM is under heavy accumulation. And with support from a new MACD buy signal and positive momentum, I’m raising my trading objective to $64 from $62, with a longer-term objective of $70, up from $65.
