Banking & Finance

Buying Blue-Chip Financials Before Earnings This Week Could Be Huge

JPMorgan

This stock trades at a still reasonable 11.8 times estimated 2021 earnings. JPMorgan Chase & Co. (NYSE: JPM) is one of the leading global financial services firms and one of the largest banking institutions in the United States, with about $2.6 trillion in assets. The company as it is today was formed through the merger of retail bank Chase Manhattan and investment bank J.P. Morgan.

The firm has many operating divisions, including investment and corporate banking, asset management, retail financial services, commercial banking, credit cards and financial transaction services.

Top analysts across Wall Street are very positive on the money center and investment giant and feel that this industry titan faces a broad recovery in nearly every aspect of its business:

  1. Leading M&A advisory and capital markets product set and market share
  2. Massive footprint of corporate and commercial banking customers
  3. Sizable wholesale payments businesses

The company has proven that it has the wherewithal to invest continually in people, products and platforms to further its market share base, extending its competitive advantage compared with most of its peers.

The dividend yield is 2.35%. The $200 Wells Fargo price target is well above the $167.23 consensus target. JPMorgan stock closed at $155.77 on Friday. Look for its report on Tuesday, the 13th.

Morgan Stanley

This is one of Wall Street’s white-glove firms, and it may be among the best buys among the banking and investment stocks. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

Last year, this Wall Street investment bank agreed on a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, it was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors.

Investors receive a 3.10% dividend. Jefferies has set a $108 price target. The consensus target is $98.62, and Morgan Stanley stock closed most recently at $90.33. The company reports on Thursday, July 15.


It is always a bit riskier to buy shares in front of the numbers, and very conservative investors may want to either wait for the results or buy smaller, partial positions. With some solid tailwinds for the rest of the year, not the least of which could be rising interest rates and a continued reopening of the economy, all these stocks make sense for growth investors with a longer timeframe.