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(Fixes typo in headline) (Recasts; adds analysts' comments and background)
April 17 (Reuters) - Analysts Meredith Whitney of Oppenheimer & Co and Richard Bove of Punk Ziegel cut their 2008 and 2009 earnings for JPMorgan Chase & Co (JPM.N), with Bove advising investors to be cautious as the bank was having a lot of difficulty dealing with the economic downturn.
However, Bove said the third-largest U.S. bank is a "great company" with a very attractive long-term future. He rates the stock "market perform" with a price target of $44.
Oppenheimer's Meredith Whitney maintained her "perform" rating on the stock.
On Wednesday, JPMorgan had reported a 50 percent drop in quarterly profit. Still, its results calmed investors as it was able to skirt the massive losses that have crippled many rivals.
"The actual operating numbers were very discouraging," Bove wrote in his note to clients.
The company's investment bank posted a loss for the quarter and principle transactions were negative, he said.
The worst deterioration was in subprime mortgages, Bove noted, even as he added that "there is deterioration everywhere."
Investment banking operations at JPMorgan suffered an $87 million loss, compared with a year-earlier $1.54 billion profit, hurt by the write-downs.
Retail banking suffered a $227 million loss for the quarter, compared with a year-earlier $859 million profit. Those operations set aside $2.49 billion for soured loans, including home equity loans.
In credit card services, profit fell 36 percent to $609 million. JPMorgan Chief Financial Officer Mike Cavanagh said he expects card charge-offs to rise gradually this year.
JPMorgan has also revised its outlook for the mortgage space as deterioration, earlier seen in home equity, is now expected in both subprime and prime mortgages, noted Oppenheimer's Whitney.
"While it is not a shock that subprime continues to deteriorate, this is one of the first indications that we have seen that housing troubles are spreading into prime mortgages," Whitney said.
For 2008, Whitney cut her earnings view for JPMorgan to $2.85 a share from $2.90 a share. For 2009, she cut her earnings estimate to $3.80 a share from $4.01 a share.
Bove cut his 2008 earnings estimate for the bank to $2.95 a share from $3.30 a share. He cut his 2009 earnings forecast to $3.31 a share from $3.88 a share.
Shares of JPMorgan fell about a percent to $44.46 in morning trade on the New York Stock Exchange. (Reporting by Tenzin Pema in Bangalore; Editing by Pratish Narayanan, Jarshad Kakkrakandy)