The only sell rating on Wall Street has been taken away.
Morgan Stanley upgraded the bank to a buy-equivalent rating, saying it is more resilient than rivals during downturns. The upgrade by analyst Betsy L. Graseck leaves JP Morgan without a sell or equivalent rating.
Graseck wrote in a note to clients that the price-to- earnings multiple was not as low as peers. The bank is making progress on meeting higher capital requirements while cost management is improving.
JPM has historically beenrated less than its peers in a hard landing bear case. She raised her price target to $150, which would suggest a 16% upside to Monday's close.
During economic downturns, stock has been more resistant.
There is a source for this.
Analysts are looking for parallels between the recession and the financial crisis. Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc., and Citigroup Inc. all saw their stock prices fall in 2008.
The current valuation of the company's shares is around 10 times forward earnings. Morgan Stanley said that peers have a lot further to fall to their trough valuations.
The upgrade follows a good few months for the biggest US bank, which in October reported its highest quarterly net interest income ever and raised its guidance for the year. Jamie Dimon doesn't believe the US can avoid a recession.
The shares rose in pre market trading. They have fallen more than the banks index this year.
Subrat Patnaik helped with the project.
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