April 20, 2009 / 2:58 PM / 10 years ago

UPDATE 1-JPMorgan does not need to issue equity: Citigroup

April 20 (Reuters) - JPMorgan Chase & Co (JPM.N) is well-positioned to pass the U.S. government’s stress test, and it does not need to issue equity, said Citigroup, which raised its price target on the U.S. banking giant’s stock by 52 percent.

JPMorgan posted a better-than-expected quarterly profit on Thursday, demonstrating the kind of resilience that allowed Chief Executive Jamie Dimon to assert the bank could pay back the government $25 billion immediately. [ID:nN16542451]

“While we do not expect Troubled Asset Relief Program repayment near-term, JPMorgan clearly has the financial flexibility to repay the government when the time comes, potentially as soon as later this year,” analyst Keith Horowitz said in a note to clients.

Citing better performance at JPMorgan’s investment bank, though offset by higher credit card losses, the analyst raised his 2010 profit estimates for the bank by 15 cents to $3.30 a share. He raised his price target on the stock to $35 from $23.

However, JPMorgan shares fell in morning trade after Bank of America (BAC.N) reported its first-quarter results and said it continued to face “extremely difficult challenges,” primarily from deteriorating credit quality. [ID:nN20380236]

Shares of JPMorgan were trading down about 4 percent at $31.93 Monday morning on the New York Stock Exchange. (Reporting by Anurag Kotoky in Bangalore; Editing by Anne Pallivathuckal)

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