JPMorgan Chase Exit PullBack Potential Upside After Earnings
$JPMorgan (JPM.US)$ is expected to release earnings results for its first quarter, before the opening bell on 12 April 2024. This earnings release is after the PPI on Thursday (11 Apr) and we have seen the market sell off after CPI came in stronger than expected at 3.5% versus 3.4% estimate.
JPM is expected to report quarterly earnings at $4.15 per share, up from $4.1 per share in the year-ago quarter. Revenue projected to be $41.96 billion, compared to $39.34 billion in the year-earlier period.
Technical is showing Top pullback, which show that its current stock price pulls below the 20-day moving average. But with the performance of the financial sector affected by the stronger CPI, we might see some weakness today (11 Apr) for JPM.
But JPM might make an upside move after its earnings if the earnings per share beat estimate.
JPMorgan Chase (JPM) Last Reported Earnings
JPM last reported earnings on 12 January 2024 before the market opened (BMO). JPM shares declined -0.7% the day following the earnings announcement to close at 168.07.
Following its earnings release, 89 days ago, JPM stock has drifted +16.3% higher. From the time it announced earnings, JPM traded in a range between 163.35 and 199.77. The last price (195.47) is closer to the higher end of range.
Estimated implied straddle for upcoming earnings is 3.6%. If we looked at how JPM has performed over the last few earnings release recently, the chances of an upside is higher, and this might signal a recovery of the financial sector after it has been impacted by the CPI move.
JPMorgan Chase (JPM) Performance Before and After Earnings
If we looked at the earnings of especially bank stocks, one thing I have learned is to look at how the stock is trading one week before the earnings, if we could see buying sentiment build up, and the stock price respond positively to it.
This could signal that market is favourable of this bank stock and there is room for upside, and there might be factors affecting the sector (financial), as long as the impact of the member stock is not significant, we could look at the stock positively.
As we can see from the chart below, JPM did have a slight decline after CPI yesterday (10 April), but buying sentiment remain strong and pretty consistent.
Though we could see MACD trending downwards, the reason might be due to the sell off triggered by the stronger CPI and fading expectations of a nearer rate cut.
Summary
Looking at how JPM would perform after its earnings release, I would say that as long as JPM earnings per share beat the estimate or $4.15 or even matches it, there will be upside for this bank stock.
Market is still interested in this stock and we could see that fluctuation due to CPI is very low, JPM lost only 0.85% compared to banking stocks which are also releasing their earnings on 12 April 2024,
$Wells Fargo & Co (WFC.US)$ lost 1.11%, $Citigroup (C.US)$ lost 2.40%. I will be looking at JPM closely in today's trading.
Appreciate if you could share your thoughts in the comment section whether you think JPM would come up better among the 3 banking stocks releasing their earnings on 12 April 2024.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SpyderCall : good read
NoahK : The upcoming JPMorgan earnings report is expected to be positive, but the company's guidance may result in a sideways movement in the stock price.
Market was overly optimistic in anticipating seven rate cuts this year, and the likelihood of this occurring is diminishing daily, as evidenced by the last session behavior on 10-year Treasury yields.
Dow daily chart candle suggests that it is poised for a reversal from a downtrend to an uptrend today. However, this prediction is subject to change based on the release of the PPI data.
In the short term, I am bullish on JPMorgan due to its strong fundamentals. However, I maintain a bearish long-term outlook due to the looming recession, which is expected to disproportionately impact the banking sector.
nerdbull1669 OP NoahK : thanks for sharing your thoughts, appreciated, I believe the market might be too focused on the rate cut, this might cause some of us to miss opportunity due to how things might move temporarily.