JPMorgan Chase (JPM) — This global financial services company has assets of nearly $2.42 trillion and operates in over 50 countries. Although earnings per share (EPS) for 2013 fell to $4.35 versus $5.20 the prior year, S&P increased its projected 2014 estimate to $6.04 from $5.96, and it expects $6.40 for 2015. These increases 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 expects JPM to raise its common stock dividend and share repurchase plan. The company currently pays an annual dividend of $1.52 for a 2.5% yield. S&P raised its 12-month fundamental price target by $1 to $66.
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.
In November and December, buying volume increased, and the stock broke to a new high. But profit-taking and a difficult month for stocks drove it to support at its 200-day moving average, where it reversed. JPM is under heavy accumulation with support from a new MACD buy signal.
The results of the Federal Reserve’s “stress test” of the nation’s largest banks released Thursday resulted in a clean bill of health for 29 of 30 banks. But it ranked Bank of America (BAC), Morgan Stanley (MS) and JPM “near the bottom of the pack.” This could result in profit-taking and a dip to JPM’s 50-day moving average at $57, which is now the buy point. My trading objective is $65 with a longer-term objective of $70.
