JPMorgan
The largest (by market cap) of the big U.S. banks, JPMorgan Chase & Co. (NYSE: JPM) has seen a share price decline of almost 39% over the past 12 months. Like Citi, JPMorgan posted its 52-week low on Tuesday, and its 52-week high will roll off the board on October 25.
The Fed’s interest rate hikes have turned from being a banker’s best friend to being a major threat, according to CEO Jamie Dimon, who has said the U.S. economy will be in recession by next year. Among his comments, “The U.S. economy currently is actually doing quite well … consumers have money. But you can’t talk about the economy without talking about stuff in the future — and this is serious stuff.”
Of 26 analysts covering the stock, 15 have a Buy or Strong Buy rating, while another 10 rate the shares at Hold. At a share price of around $102.00, the upside potential based on the median price target of $135.00 is 32.4%. At the high price target of $162.00, the upside potential is 58.8%.
Analysts are expecting JPMorgan to report third-quarter revenue of $31.88 billion, up by about 3.8% sequentially and by 7.5% year over year. Adjusted EPS are forecast at $2.86, up 3.6% sequentially but 16.6% lower year over year. For the full 2022 fiscal year, estimates call for EPS of $11.10, down 27.5%, on revenue of $126.29 billion, up 3.8%.
JPMorgan stock trades at 9.2 times expected 2022 EPS, 8.2 times estimated 2023 earnings of $12.42 and 7.7 times estimated 2024 earnings of $13.23. The stock’s 52-week range is $101.85 to $172.96. JPMorgan pays an annual dividend of $4.00 (yield of 3.81%). Total shareholder return for the past 12 months was negative 36.9%.
Morgan Stanley
Morgan Stanley (NYSE: MS) has seen its share price drop by nearly 21% over the past 12 months. From the 52-week high set in February, the stock is down nearly 30%.
In addition to all the troubles facing the other big banks, Morgan Stanley is among the lenders that agreed to put up $13 billion for Elon Musk’s buyout of Twitter. It looked like a good deal at the time, but now it looks like the lenders could face a cold market for debt. According to @9fin, the bank is on the hook for $5.5 billion in loans to Musk and that could translate into tens, if not hundreds, of millions in writedowns.
Sentiment remains bullish on the stock, with 20 of 28 brokerages assigning a Buy or Strong Buy rating. Another seven rate the stock at Hold. At a share price of around $77.00, the upside potential based on a median price target of $96.50 is 25.6%. At the high target of $115.00, the upside potential is 49.4%.
The consensus estimate for third-quarter revenue is $13.31 billion, up about 1.4% sequentially and down about 9.8% year over year. Adjusted EPS are forecast at $1.51, down about 1.2% sequentially and by 26.0% year over year. For the full 2022 fiscal year, analysts are looking for revenue of $54.66 billion, down 8.5%, and EPS of $6.62, down by 19.5%.
Morgan Stanley stock trades at 11.6 times expected 2022 EPS, 10.0 times estimated 2023 earnings of $7.68 and 8.9 times estimated 2024 earnings of $8.64 per share. The stock’s 52-week range is $72.05 to $109.73, and the bank pays an annual dividend of $3.10 (yield of 3.95%). Total shareholder return over the past year was negative 18.3%.
UnitedHealth
The country’s largest health insurer, UnitedHealth Group Inc. (NYSE: UNH) has posted a share price increase of 23.4% over the past 12 months. UnitedHealth’s stock posted its 52-week low on October 13, 2021, and its 52-week high in August.
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