Sept 15 (Reuters) - JPMorgan Chase & Co (JPM.N) could incur increased markdowns from likely disruption in the financial markets due to Lehman Brothers’ bankruptcy filing and rival Merrill Lynch agreeing to be taken over, said veteran bank analyst Richard Bove.
Though JPMorgan says it is not a major lender to Lehman Brothers Holdings LEH.N, the company is a major counter-party to a number of Lehman transactions, Ladenburg Thalmann’s Bove said.
Bove also expects a high level of losses for JPMorgan from its sizable position in credit card loans, home equity loans, automobile loans and loans to retail establishments that service the consumer.
Bove cut his earnings-per-share view for 2008 on the company by 4 percent to $2.14 and for 2009 by nearly 3 percent to $2.70.
But, he maintained his “neutral” rating on the stock, saying the bank has very little exposure to a number of the more exotic securities that have been created in recent years and is relatively well protected. (Reporting by Sweta Singh in Bangalore; Editing by Amitha Rajan)