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S&P Capital Banking equity analyst Erik Oja still sees J.P. Morgan as an attractive bet despite the $2B reported trading loss.
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Eric judges of banking equity analyst at S&P capital Eric thanks for being here.
-- -- a one off is this just a big one big giant two billion dollar boots for JPMorgan and do we need to worry about.
More losses at Morgan are even at other banks.
While I think it's -- morally it's a one off situation at JPMorgan it's.
Two to three billion dollars and the market certainly have punish JPMorgan their market cap is down twelve billion dollars today.
Com and as far as.
What else is out there with Citigroup and Bank of America.
Certainly they would engage in some similar strategies.
But I don't think any of the other large US banks besides the top three would do.
Cutting edge type of hedging strategies like JPMorgan did.
But would say about Jaime diamonds leadership in the risk controls.
And in Jamie -- get too much of a free pass from investors if you well over the years because he seemed to be so incoming into the back.
While.
Investors did give him credit for staring JPMorgan through the financial crisis with -- ever incurring a quarterly loss and he should get credit and their lots that was reported yesterday.
Will also would not lead to a quarterly loss so I I would say it's he's done a very impressive job of running the bank.
For more than half a decade.
However that said some questions should be asked about the level of risk management at the bank.
And what happened is it's likely that.
They thought it was under control remember several weeks ago he said this is a tempest in a teapot.
And it I guess there should have probably been better disclosure as to the size of it and finally yesterday they had to just come out and say what it was.
That should ever should everybody have paid more attention to that story in the Wall Street Journal is a question Eric.
With the start of the stock is off its lows of the session right now it's only I -- only down about seven and three quarter percent would you be a buyer of the stock here.
Yes I have 45 dollar target price.
And we see the stock attractive on an earnings basis about ten times.
Future earnings.
We reduced our.
-- second quarter earnings estimate.
And our full year 2012.
EPS estimate we still think the bank -- -- four dollars and fifty cents this year coming up.
All we think it's an isolated event we do not expect.
Further losses from other types of trading.
And hedging activities.
We see bank we see JPMorgan as an attractive.
Banc despite what happened yesterday.
Eric thank you so much as they cannot -- -- air -- we should point out McDonald.
The bet was on the -- that JPMorgan was making was not was on the economy improving was on corporate credit if you will so that says something about you know -- been a different bets that went -- -- -- open -- -- my have a different impact on the market.
