JPMorgan Raised to Buy, Goldman Lowered by Deutsche Bank

JPMorgan Chase & Co. (JPM) had its price target and recommendation raised by Deutsche Bank AG while investors were advised to hold on to Goldman Sachs Group Inc. (GS) following its 48 percent stock-price rise since Aug. 2.

JPMorgan shares have lagged (JPM) 30 percent behind global banks since early August, analysts led by Matthew O’Connor wrote in a research note by Frankfurt-based Deutsche Bank. JPMorgan, which reported its third record year of profits with $21.3 billion in net income last year, may see annual operating expenses drop as much as $5 billion in coming years partly because costs to service mortgages will drop, according to the note.

“We think JPM is the best-positioned market-sensitive bank for a pickup in consumer loan growth,” O’Connor wrote, referring to New York-based JPMorgan by its stock ticker. Deutsche Bank upgraded JPMorgan to buy from hold and raised its 12-month price target (JPM) to $53 from $48.

Deutsche Bank lowered Goldman Sachs to hold from buy because the New York-based bank is trading close to its 12-month price target of $144. The firm doesn’t have the same opportunities for cost savings as JPMorgan, and is trading at a premium to other large investment banks, O’Connor said in the note.

To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net