UPDATE 1-Credit Suisse keeps estimates, target on JPMorgan

lunes 17 de marzo de 2008 07:53 CET
 

(Adds details from research note, background)

March 17 (Reuters) - Credit Suisse said it was maintaining its earnings estimates and price targets for JPMorgan Chase & Co (JPM.N: Cotización) following the firm's announcement of its plans to acquire Bear Stearns BSC.N.

JPMorgan said on Sunday it would buy stricken rival Bear Stearns for just $2.00 a share in an all-stock deal that values the investment bank at the centre of the U.S. credit crisis at about $236 million.

Credit Suisse said it expected the deal to add to JPMorgan's earnings per share in 2008 and 2009, but added that the size of Bear Stearns will mean a modest addition to earnings in the very near term.

On Friday, Credit Suisse lowered its earnings estimate on Bear Stearns to $2.25 per share from $7.50 for 2008 and to $4.10 from $9.00 for 2009.

The deal would be positive for JPMorgan's earnings even on these reduced estimates and before realization of synergies, the brokerage added.

However, Credit Suisse, which has a price target range of $50 to $55 and an "outperform" rating on JPMorgan, added that it had less confidence in the near-term market and macro-economic outlook.

For 2008, the broker expects JPMorgan to earn $3.65 per share. For 2009, it expects earnings of $4.85 per share on GAAP basis.

(Reporting by Ramya Dilip in Bangalore, Himani Sarkar; editing by Ted Kerr)