Shares of J.P. Morgan Chase & Co. (JPM) rose 0.8% in midday trading Thursday, to buck the broad-market selloff, after Deutsche Bank analyst Matt O'Connor turned bullish on the banking giant, citing "attractive" valuation given recent underperformance and an improved outlook for the sector. O'Connor raises his rating to buy from hold, and lifted his price target to $115 from $105. The stock was one of just five of 30 Dow Jones Industrial Average components gaining ground, as the Dow tumbled 551 points, or 1.9%. O'Connor also upgraded Bank of America Corp. (BAC) to buy from hold, for similar reasons as J.P. Morgan, and BofA's stock inched up 0.1%. O'Connor said after being negative on banks all year, he thinks their relative performance should improve, as macro indicators have improved, fiscal and monetary policy remains accommodative and growth in COVID-19 cases has slowed in recent weeks. "But while the overall market has rallied, bank stocks have continued to lag--we believe mostly due to revenue growth concerns (prolonged low rates and weak loan growth) as well as an uncertain credit outlook," O'Connor wrote in a note to clients. Within the sector, he believes J.P. Morgan Chase and BofA are among the higher quality banks and have attractive valuations." Shares of J.P. Morgan Chase have dropped 26.5% and BofA have lost 26.6% year to date, while stock has lost 27.1% year to date through Wednesday, while the SPDR S&P Bank ETF (KBE) has shed 31.2% and the S&P 500 has gained 7.9%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 03, 2020 12:17 ET (16:17 GMT)
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