JPM Falls Flat After Second-Quarter Earnings Report

Profits, however, fell around 50% from last year

Deputy Editor
Jul 14, 2020 at 11:15 AM
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The shares of JPMorgan Chase & Co. (NYSE:JPM) fell flat after initially rising this morning on a second-quarter earnings and revenue report that came in well above analysts' estimates. Some of this downside may be due to  a more than 50% loss in profits since last year, as the bank giant added to its loan loss reserves as protection against potential loan defaults. Results, however, were propped up by record trading revenue. At last glance, JPM is up 0.1% at $97.77

Last time we checked in on JPM, the stock was eyeing an influx of options activity, with a recent rally contending with its 80-day moving average The shares managed to break north of this region just a few days later, before peaking at a three-month high of $115.77 in early June. While the aforementioned 80-day is now serving as support, the stock is running up to another area of overhead pressure at its 120-day moving average. 

Options traders, meanwhile, are picking up long calls at a quicker-than-usual clip. This is per the security's 50-day call/put volume ratio of 3.20 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 1% of readings in its annual range. Moreover, JPM's Schaeffer's put/call open interest ratio (SOIR) of 0.55 sits in the lowest percentile from the past 12 months, implying short-term option players haven't been more call-heavy in that same span of time. 

These bullish bets are winning out today, too. So far, 130,000 calls and 42,000 puts have crossed the tape -- double the average intraday amount. Most popular is the July 100 call, which expires this Friday, July 17. 

Still, the majority of the brokerage bunch is eyeing JPM with caution. Of the 16 in coverage, nine call the equity a "hold" or worse, while the remaining seven sport a "buy" or better rating. Meanwhile, the consensus 12-month target price of $112.72, is a relatively healthy 15.4% premium to current levels. 


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