J.P. Morgan Chase & Co.JPM

Morningstar Rating

Stock Research and Analysis

by Jaime Peters, CFA, CPA

J.P. Morgan Chase, with Jamie Dimon at the helm, has been a bright spot in this turbulent market. The company is not immune; its credit card unit and retail bank are suffering from the housing market problems. But a strong balance sheet in this time Read more

Bulls Say

The acquisition of Bear Stearns should add $250 million per quarter to J.P. Morgan's bottom line once the credit markets stabilize.

J.P. Morgan purchased failed WaMu from the FDIC for just $1.9 billion, gaining national scale and one of the largest deposit bases in the U.S.

J.P. Morgan's reputation and conservative balance sheet positioning have allowed the company to maintain customer confidence during recent times of stress. Read more

Bears Say

Although J.P. Morgan makes substantial profits from its derivative book, it is an opaque area of the balance sheet, and unexpected losses could occur in any quarter. Although much of this exposure is offsetting, it is nearly impossible to get a grasp on the real underlying risk this creates.

Market perception, as much as fundamentals, caused a near collapse in the stand-alone investment banking model. If this fear turns to all investment banks, J.P. Morgan's investment banking unit could rapidly deteriorate, dragging down the rest of the company.

Loan losses continue to rise. A double-dip economic recession could hurt results for the next several years, and even banks as well-capitalized as J.P. Morgan might struggle.

The proposed TARP tax would hit J.P. Morgan harder than most regional banks as a result of its non-deposit funded investment banking business. Read more

Strategy

J.P. Morgan's universal banking strategy calls for a comprehensive list of product offerings in investment banking, retail banking, credit cards, asset management, and cash management. The company recently Read more

Management

Jamie Dimon has led J.P. Morgan since Dec. 31, 2005. In nearly four years, he has made his mark on the financial giant, showing the brilliance and long-term strategic thinking that made him such a force at Citigroup C and Bank One (even earning our Read more

Profile

J.P. Morgan Chase is one of the top four bank holding companies in the United States, based on assets. It is the top corporate syndicated lender and operates banking offices Read more

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