On Friday, Oppenheimer revised its price target for JPMorgan Chase & Co. (NYSE:JPM), decreasing it slightly from $217.00 to $215.00, while retaining an Outperform rating on the stock. The adjustment follows JPMorgan's recent announcement during its investor day that the bank plans to make a substantial $1 billion donation to its charitable foundation.
The analyst from Oppenheimer has also updated the second-quarter earnings per share (EPS) estimate for JPMorgan to $4.07, down from the previous estimate of $4.31. This conservative revision takes into account the uncertainty regarding the timing of the expected gains from the bank's Visa (NYSE:V) stock, which are anticipated to balance out the charitable contribution.
JPMorgan's CEO, Jamie Dimon, has indicated that there might be reserve builds due to growth in the credit card portfolio. Conversely, CFO Jennifer Piepszak (referred to as CFO Barnum in the context) has pointed out that the bank is well-reserved for a weighted average peak unemployment rate of 5.4%, a scenario that is not currently being approached.
The firm suggests that investors should concentrate on core economic earnings when assessing the bank's value. According to the analyst, while reserve builds and releases can affect reported earnings, they are largely considered to be accounting adjustments that do not reflect the underlying economic performance of the company.
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