'Better Names to Own' Than JPMorgan: FBR
NEW YORK (TheStreet) -- FBR analyst Paul Miller wasted no time on Thursday in downgrading JPMorgan Chase (JPM) following CEO James Dimon's announcement of a $2 billion second-quarter trading loss.
Saying there was "little clarity into and a lot of uncertainty surrounding JPMorgan's future earnings," Miller cut his rating for JPMorgan to market perform from outperform, and lowered his price target for the shares to $37 from $50.
Although he believes "this event is largely isolated to JPMorgan and its internal controls," Miller said the announcement would "certainly be fodder for the Washington, D.C. crowd pushing for the Volcker Rule and will certainly increase the headline risk for JP Morgan and the industry."
 |
| JPMorgan Chairman and CEO Jamie Dimon |
More Headlines
The political reaction against banks and their hedging activities began Thursday, with a press release from Sen. Carl Levin (D-Mich.), who said that "the enormous loss JP Morgan announced today is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making," and that "today's announcement is a stark reminder of the need for regulators to establish tough, effective standards to implement the Merkley-Levin language to protect taxpayers from having to cover such high-risk bets."
7 Dividend Stocks You Can't Ignore Right Now >>
Miller said that "while JPMorgan's core business lines remain strong and intact, we worry about the potential risk the credit derivatives portfolio poses to earnings going forward," and that "the company could hold off on repurchasing shares in the near term while it gains a better understanding of potential losses as a result of this portfolio."