JPMorgan Chase & Co (NYSE:JPM) — Widely considered to be one of the leading global financial services companies, JPM stock has been praised for its excellent management.
Standard & Poor’s views JPM as a beneficiary of a number of growth catalysts, but higher interest rates, along with an improving economy and reduced regulations, are the main drivers in the next several years. JPMorgan stock reported 2016 EPS of $6.19 up from $6 in 2015. S&P projects earnings of $6.47 in 2017 and $7.25 in 2018.
Even though JPM has agreed to pay $797.5 million to settle the remaining litigation relative to the collapse of Lehman Brothers, and this follows a $1.42 billion payment, the firm is so strong as to absorb the losses. And management was cleared by a judge overseeing the case of any improprieties in the clearing and custodianship of Lehman. Thus S&P rates JPM as a “four-star buy” with a 12-month target of $98 based on 15.1X their earnings estimate.
Technically, JPM stock is in minor consolidation following an advance from about $68 in November to a high of almost $94 in February. Near-term support rests within a zone of $83.30 to $87.55 with near-term resistance at the 50-day moving average ($88.45) and then the descending triangle’s 20-day moving average now at $90.83.
Note the CBR Buy on Wednesday from my internal indicator, which, when coupled with an oversold MACD, provides a strong technical case for buyers. Traders should try to buy JPM at under $87 with a target of $100. Long-term investors may take a position in this A- (S&P) rated stock for income (annualized dividend yield of 2.3%) and long-term growth.
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