JPMorgan Q3 report: ‘it has better position in the capital markets’

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JPMorgan Chase & Co (NYSE: JPM) ended in the green on Friday after reporting market-beating results for its fiscal third quarter.

Expert reacts to JPMorgan’s Q3 results

Discussing the earnings report on CNBC’s “Power Lunch”, Doug Butler – Senior Vice President at Rockland Trust picked the JPMorgan stock over its rival.

JPMorgan has a better position in the capital markets. They have exposure to main street America. We think they’re the best franchise and also the most attractively valued stock. They’re the only bank we currently own.

Earlier this week, JPMorgan CEO Jamie Dimon said the macro headwinds, including inflation, quantitative tightening, rate hikes, and the Ukraine war will likely push the U.S. economy into a recession by the summer of 2023 (read more). Still, Butler added:

We think there’s significant upside especially because we’re not as convinced of a severe recession. The upside is probably being under-priced. They’re reserving, but they may end up releasing these before having to take them.

JPMorgan set aside $808 million in reserves this quarter. Its net interest income went up 34% on higher interest rates.

What they did today was they shored up their balance sheet. They took additional reserves. They really built out a fortress that can withstand a recession if it does indeed come.

JPMorgan stock up on market-beating results

  • Earned $9.74 billion versus the year-ago $11.69 billion
  • EPS dropped to $3.12, as per the earnings press release
  • Reported revenue jumped 10% YoY to $32.73 billion
  • Consensus was $2.90 a share on $32.12 billion revenue
  • Took a $959 million hit from securities losses

Wall Street recommends that you buy JPMorgan stock as it has upside to $135.

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