JPMorgan shares nosedive as bank misses earnings and pauses buybacks

JPMorgan shares nosedive as bank misses earnings and pauses buybacks
4 weeks ago
2 mins read

On July 14, JPMorgan Chase & Co (NYSE: JPM) reported its earnings for the second quarter. The bank missed estimates for both revenue and EPS ($2.76 EPS vs. $2.89), while the net income reported was up about 0.7% Y/Y with $30.72 billion, but still missed analyst estimates by $1.12 billion.

Furthermore, the company announced that the lender is halting share buybacks. Certainly, the bear market is affecting JPMorgan’s economic outlook with lower revenue from investment banking and higher provisions for credit losses and consequently, shares of JPM fell more than 5% on July 14.

Investors were unconvinced when in a call with analysts Thursday morning JPM Chief Executive Jamie Dimon tried to appease them by clarifying his worries over the economy. 

“There’s a range of potential outcomes from a soft landing to a hard landing. It’s not going to change how we run the company,” Dimos said.

JPM chart and analysis

In the last month, JPM has been trading in the range of $110 – $119.29 up until the announcement of the Q2 earnings call. The resistance zone has formed within a range from $112.60 to $114.36 while making a new 52-week low.

JPM 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Nevertheless, analysts rate the shares a moderate buy, predicting that the price of shares in the next 12 months will be $143.78, higher by 33.13% than the current trading price of $108.00.

Wall Street analysts’ price targets for JPM. Source: TipRanks  

A bright light

Additionally, among a few bright spots in the Q2 report, JPMorgan`s return on tangible common equity (ROTCE) hit 17%, meaning that the bank hit the target that it had set earlier. Moreover, it saw an increase in trading revenue by 15%, while fixed income and equities traded equally assisted by market volatility.

Worries around inflation and a possible recession along with the return of the loan loss provisions for banks may have spooked investors. If JPMorgan manages to hold the support lines the stock could continue trading sideways in the near term until impetus for a breakout comes about. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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Dino Kurbegovic

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.