June 19, 2009 / 12:24 PM / 10 years ago

UPDATE 1-Baird sees faster profit recovery for JPMorgan vs peers

June 19 (Reuters) - JPMorgan Chase & Co’s (JPM.N) expanding pre-provision earnings power and strong capital and reserve position should result in faster earnings recovery relative to its peers, said analysts at Robert W. Baird, who view the company’s shares as an attractive buying opportunity.

In addition, JPMorgan’s above-average exposure to shorter and early-cycle loan products such as card and home equity may result in a more rapid earnings recovery than banks with exposures to later-cycle products such as commercial real estate and commercial and industrial loans, analysts said.

They maintained their “outperform” rating and price target of $42 on JPMorgan shares.

While JPMorgan’s strong balance sheet and reserves have made the stock defensive, the company’s expanding earnings power could make the stock offensive as the economy recovers, the analysts added.

Earlier this week, JPMorgan returned $25 billion in bailout funds to the U.S. government, extricating itself from restrictions on pay for top executives that were tied to the bank rescue funds.

JPMorgan shares were up about 1 percent to $34.53 in pre-market trade. They closed at $34.17 Thursday on the New York Stock Exchange. The shares have risen 8 percent since the start of the year. (Reporting by Tenzin Pema in Bangalore; Editing by Himani Sarkar)

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