(By Balachander) JPMorgan Chase & Co. (NYSE:JPM) shares were downgraded to "Hold" from "Buy" by Deutsche Bank analyst Matt O'Connor, who cited less compelling risk/reward.
O'Connor, who also lowered price target on the stock to $40 from $43, said he has become "increasingly" concerned that EPS expectations may be too high, capital deployment may disappoint and regulatory/legal matters remain uncertain.
Given these and a 19 percent rise in the stock off recent lows, the analyst thinks the risk/reward is less compelling – and therefore downgraded JPM to Hold.
With the recent rally in the stock, JPM shares are down just 9 percent since 2Q's trading losses were disclosed 5/10.
For most of the past 5 years, several US competitors have been focused on de-risking, boosting liquidity and rebuilding capital, O'Connor wrote. "But risks at most peers no longer seem to be outsized vs. those at JPM, liquidity and capital differences have narrowed and certain peers seem ready to be more aggressive in maintaining/gaining market share."
The analyst believes this implies additional market share gains for JPM will be less likely and may suggest some share loss in certain areas (such as capital markets, following huge gains in recent years).
The stock, which has been trading between $27.85 and $46.49 over the past year, fell 2.20 percent to trade at $36.08 on Monday.