Despite Market Pressures, Pre-Earnings JPMorgan Looks ‘Healthy’

At least one analyst thinks JPMorgan is looking attractive ahead of earnings, which are slated to be released later this week, on July 14 ahead of the market open.

Writing Monday (July 11) for Seeking Alpha, investor Don Dion, who heads an eponymous money management firm, noted that JPMorgan has passed its stress test and also has gotten the go-ahead for a stock buyback to the tune of $10.6 billion. JPMorgan has also been expanding internationally, with notable pushes into India against a backdrop where other firms are pulling back in that region, which affords the bank to increase business and scale there. In addition, JPM trades at some attractive metrics, with a 3.3 percent dividend yield, and trades at a 10x multiple to forward earnings estimates, with a discount to the market multiple.

The firm also has a good track record of beating earnings estimates, said Dion.

Balance sheets across the sector remain healthy, with cash on the books and jobs reports showing health in the U.S. economy, representing a safe haven as the company is well-positioned to take advantage of international opportunities and weather economic turmoil abroad, especially tied to Brexit.

Dion said that there’s also the attraction of a yield tied to the buyback, which, taken with the dividend, also brings total yield to 8.2 percent.