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DEUTSCHE BANK CUTS ESTIMATES, TARGET ON JPMORGAN
On Thursday, JPMorgan Chase (JPM) posted $0.07, vs. $0.86, fourth quarter EPS. Deutsche Bank analyst Michael Mayo says JPM reported weakness in trading and investment banking, asset management and private equity; these segments will likely have lower core earnings than previous periods in the near term.
Mayo notes the company guided for higher charge-offs in all products, including home equity, cards, and commercial. He expects EPS to remain under pressure due to rising credit costs and lower core revenues.
He cuts 2009 EPS view by $0.50 to $1.55 (consensus is $2.30), 2010's by $0.30 to $2.90 (consensus of $3.53). He also cuts $34 price target to $30. He kept a hold opinion on the stock.
KEYBANC CUTS VISA, MASTERCARD, HEARTLAND PAYMENT TO HOLD FROM BUY
Keybanc analyst Anurag Rana says U.S. bank card spending data was much worse than he expected.
Earlier today, Rana says two of the three largest U.S. issuers, Bank of America (BAC) and Citigroup (C), of Visa (V) and MasterCard (MA) cards reported quarterly results which included rapidly accelerating volume declines. Rana says this followed JPMorgan's charge volume data reported yesterday.
Rana notes Visa and MasterCard remain heavily exposed to worsening card spending trends in the U.S. and data appear to indicate spending contracting at accelerating rate. He thinks volume declines could be worse than his conservative assumptions.
ST ROBINSON HUMPHREY KEEPS NEUTRAL ON ELIZABETH ARDEN
ST Robinson Humphrey analyst William Chappell says Elizabeth Arden (RDEN) preannounced a dismal second quarter, as it sees $0.57-$0.61 EPS (excluding items) and $365-$370 million revenue; he saw $0.93 EPS and $429 million revenue.
While he is not surprised RDEN faced a tough holiday season (fragrances are discretionary in nature), the magnitude of its top-line decline is somewhat alarming. He says weakening trends during the quarter include: further deterioration at department stores; worsening conditions in travel business.
With few catalysts on horizon, Chappell expects the rest of fiscal year 2009 (June) to be extremely challenging. He cuts $1.38 fiscal year 2009 EPS view to $0.74 and $1.50 fiscal year 2010 estimate to $0.95.
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