JP Morgan (NYSE:JPM) Beat Out its Competitors in Earnings. Here’s How.
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JP Morgan (NYSE:JPM) Beat Out its Competitors in Earnings. Here’s How.

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JP Morgan Chase played it safe by taking calculated risks. It avoided massive losses by staying away from risky leveraged buyout loan deals.

In a world where macro uncertainty has made investors worrisome, even big investment banking behemoths like JP Morgan Chase (NYSE: JPM) have taken calculated risks to avoid massive losses.

According to a Wall Street Journal report, the investment bank has stayed miles away from risky corporate deals like the Twitter deal that led to huge losses for its peer banking counterparts.

On October 14, JPM delivered upbeat Q3 results, with both revenues and earnings surpassing analysts’ estimates.

Concurrent with the earnings, JPM CEO Jamie Dimon stated that the bank has cautiously maintained a very low exposure to high-risk, leveraged loans or buyout loans. Likewise, the company did not report leveraged loan write-downs during the quarterly results.

In contrast, its peers, including Bank of America (NYSE:BAC), Goldman Sachs Group Inc. (NYSE:GS), and Morgan Stanley (NYSE:MS) have supported big takeover deals. The valuation of their leveraged loans took a whack due to a rise in interest rates that led to a cautious outlook on deals.

Is JPM a Buy today?

As per TipRanks, analysts are cautiously optimistic about the stock and have a Moderate Buy consensus rating, which is based on seven Buys, three Holds, and one Sell.  JPM’s average price forecast of 138.55 implying an upside potential of 2.4% at current levels.

Notably, JPM stock has a top-notch Smart Score of a “Perfect 10” on TipRanks, indicating that the stock has strong potential to outperform market expectations. Further, JPM stock has a very positive signal from hedge fund managers, who added 8.4 million shares during the last quarter.

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