Zacks Investment Research downgraded shares of JPMorgan Chase & Co. (JPM) from NEUTRAL to UNDERPERFORM on May 29, 2014, with a target price of $50.00.
We are downgrading our recommendation on JPMorgan to Underperform based on management's lower guidance on market revenues. Also, the company failed to overcome the tough industry backdrop and missed the Zacks Consensus Estimate in the first quarter 2014. Lackluster consumer and corporate activities, weak trading volumes and sluggish mortgage banking dragged the results. Also, fundamental pressure from a low interest rate and slow loan growth made matters worse. While its prudent expense management was reflected in the non-interest expenses, pressure on the top line and higher-than-expected provision dominated. We anticipate continued synergies from business diversification, steadily improving retail banking performance, cost containment efforts and a strong capital position. Nevertheless, pressure on net interest margin, a stringent regulatory environment, slow client activity and investigations and litigations remain major near-term concerns.
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