JPMorgan (NYSE:JPM) and Deutsche Bank (NYSE:DB) have been pulled into lawsuits by several of the late sex offender Jeffrey Epstein’s victims. The two largest lenders in the U.S. were accused of turning a blind eye to suspicious transactions in Epstein’s accounts to benefit financially. The lawsuits were filed on Thursday in New York.
The victims claimed that the banks were aware that facilitating Epstein’s offenses would help them earn millions of dollars. JPMorgan was accused of failing to remove Epstein as a client despite multiple unaccounted transactions and even his subsequent conviction.
On the other hand, Deutsche Bank was charged with onboarding Epstein as a client because Epstein’s accounts (more than 40, as counted by New York’s Department of Financial Services) could generate $4 million a year in fees. In essence, after JPMorgan started cutting itself off from Epstein in 2013, Deutsche Bank became the go-to bank for him to run his sex trafficking operations, which included payments to victims. Deutsche Bank failed to flag such hefty and suspicious transactions.
In 2020, Deutsche Bank paid a $150 million penalty for failing to maintain compliance and issued an apology for taking on Epstein as a client.
Is DB Stock a Good Buy?
As with JPMorgan, Wall Street is cautious about DB stock as well. The Moderate Buy consensus rating on it is supported by seven Buys, five Holds, and one Sell. Analysts expect the stock to go up 29% to $13.72 over the next year.
What is the Future of JPM Stock?
Wall Street is cautiously optimistic about JPMorgan, with a Moderate Buy consensus rating based on seven Buys, four Holds, and one Sell. This means that analysts are fairly optimistic about the bank’s long-term prospects.
Looking at the short term, the average price target for JPM stock stands at $140.33, which indicates a 2.83% upside in the next 12 months.
The bank’s price-to-book value of around 2X also indicates that the stock price is just about twice as much as the company’s intrinsic value (the amount per share expected to be returned to shareholders in of bank’s liquidation). This is a reasonable value, given the scale of the business.