July 17, 2009 / 1:38 PM / 9 years ago

UPDATE 1-Analysts raise 2009 earnings view on JPMorgan

July 17 (Reuters) - At least three brokerages, including Wells Fargo, raised their full-year earnings estimates for JPMorgan Chase & Co (JPM.N) on Friday, a day after the bank posted better-than-expected quarterly profit on record investment banking and trading results.

JPMorgan showcased its balance-sheet strength and continued execution across key businesses, analysts at Citigroup said.

Analysts at Wells Fargo, who also raised their third-quarter earnings estimates, said at current prices, they expect JPMorgan will likely return to share repurchases to bolster shareholder returns.

Citigroup analysts led by Keith Horowitz, however, said they do not see large scale buybacks by JPMorgan until the second half of 2010, as the bank’s Tier 1 ratio may be hurt by the repayment of warrants and impact of accounting rules.

JPMorgan’s Tier 1 ratio, which stands at 7.7 percent, could fall to 7.2 percent by the first quarter of 2010, Horowitz said.

“Although we believe credit may continue to deteriorate, given JPMorgan’s strong reserve and capital position, we anticipate less of a need to build reserves going forward,” analysts at Keefe, Bruyette & Woods said.

Meanwhile, Fox-Pitt Kelton cut its second-half earnings view for JPMorgan to 67 cents a share from 71 cents a share, primarily on higher credit costs.

For the earnings estimate changes, please double-click [ID:nWNAB8303] [ID:nWNAB8320] [ID:nWNAB8177] (Reporting by Archana Shankar in Bangalore; Editing by Anne Pallivathuckal)

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