JP Morgan (JPM, $100.61) tops Q3 earnings expectations

JPMorgan Chase & Co.   earnings for the third quarter earnings surpassed expectations, amid the bank’s reduction of its credit loss provisions.

The financial behemoth’s earnings for the three months ending in September came in at $2.92 per share, well ahead of the Street consensus forecast of $2.22 per share.

Revenues fell -0.66% year-over-year to $29.9 billion, again beating analysts' expectations of $28.3 billion.

JPMorgan’s credit loss provision for the quarter rose by $611 million,  much lower figure than the front-loaded $10.5 billion booked over the quarter ending in June. The amount is also lower than market expectation of $1.8 billion to $6 billion.

Expenses rose from last year to $16.9 billion.

“JPMorgan Chase earned $9.4 billion of net income on nearly $30 billion of revenue and we maintained our credit reserves at $34 billion given significant economic uncertainty and a broad range of potential outcomes," CEO Jamie Dimon said. "We further strengthened our capital and liquidity position, increasing CET1 capital to $198 billion (13.0% CET1 ratio, up 60 basis points after paying the dividend) and liquidity sources to $1.3 trillion."

Dimon said the bank could resume its share buybacks in the first quarter of next year, depending on the Federal Reserve's cap on shareholder returns, which was extended until the end of 2020 earlier.

According to Tickeron's AI-powered scorecard, JPM is a "STRONG BUY".

JPM's RSI Indicator ascending out of oversold territory

The RSI Indicator for JPM moved out of oversold territory on September 25, 2020. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 23 similar instances when the indicator left oversold territory. In 16 of the 23 cases the stock moved higher. This puts the odds of a move higher at 70%.

Current price $100.59 crossed the resistance line at $101.09 and is trading between $101.09 resistance and $100.44 resistance lines. Throughout the month of 09/10/20 - 10/12/20, the price experienced a +4% Uptrend. During the week of 10/05/20 - 10/12/20, the stock enjoyed a +3% Uptrend growth.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on October 05, 2020. You may want to consider a long position or call options on JPM as a result. In 48 of 82 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 59%.

The Moving Average Convergence Divergence (MACD) for JPM just turned positive on October 02, 2020. Looking at past instances where JPM's MACD turned positive, the stock continued to rise in 24 of 47 cases over the following month. The odds of a continued upward trend are 51%.

JPM moved above its 50-day Moving Average on October 05, 2020 date and that indicates a change from a downward trend to an upward trend.

The 10-day Moving Average for JPM crossed bullishly above the 50-day moving average on October 12, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 7 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 47%.

Following a +3.84% 3-day Advance, the price is estimated to grow further. Considering data from situations where JPM advanced for three days, in 164 of 318 cases, the price rose further within the following month. The odds of a continued upward trend are 52%.

Bearish Trend Analysis

The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 46%.

JPM broke above its upper Bollinger Band on October 08, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for JPM entered a downward trend on October 05, 2020. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 59%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.07.

The Tickeron Profit vs. Risk Rating rating for this company is 40 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 86, placing this stock slightly better than average.

The Tickeron PE Growth Rating for this company is 47 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 55 (best 1 - 100 worst), indicating steady price growth. JPM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 68 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: JPM's P/B Ratio (1.33) is slightly higher than the industry average of (0.82). P/E Ratio (13.80) is within average values for comparable stocks, (10.87). Projected Growth (PEG Ratio) (0.68) is also within normal values, averaging (4.45). Dividend Yield (2.44) settles around the average of (2.75) among similar stocks. P/S Ratio (2.08) is also within normal values, averaging (1.57).

The Tickeron SMR rating for this company is 90 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

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