Oppenheimer Upgrades JPMorgan and Morgan Stanley to Outperform on Rising Rates and Loan Growth
2022.05.03 15:41
Oppenheimer Upgrades JPMorgan (JPM) and Morgan Stanley (MS) to Outperform on Rising Rates and Loan Growth
Oppenheimer analyst Chris Kotowski upgraded Morgan Stanley (NYSE:MS) and JPMorgan (NYSE:JPM) to Overweight.
New price targets on MS and JPM are $111.00 per share and $167.00 per share, respectively.
“Given the large pullback in the stocks and modestly higher estimates, the average bank relative P/E multiple is now down to 52%. The declines in JPM, MS, and SIVB now leave them all with ~30%+ upside potential in our valuation model,” Kotowski said in a client note.
The analyst believes investors are “underestimating the qualitative difference in how credit risk is taken and managed today versus prior to the Great Financial Crisis.”
As far as earnings are concerned, Kotowski said they yielded no surprises.
“Core preprovision earnings (PPE) for our composite of $35.8B were exactly in line with expectations, and NCOs of $3.1B bettered our $3.7B estimate. Thus, there were gives and takes (trading stronger, mortgage and investment banking weaker), but on balance, results tracked closely to expectations. Forward guidance, however, improved, mainly on rate movements,” the analyst added.
By Senad Karaahmetovic
