Since Brexit, major U.S. banks have streamlined their European operations as they could no longer serve their European Union (E.U.) clients out of London.
Global investment bank JPMorgan Chase & Co. (NYSE: JPM) has followed suit and restructured its E.U. operations, according to Reuters.
Restructuring
JPMorgan has merged most of its European Union businesses into a single entity in Germany. Luxembourg and Irish entities have been combined with German business JP Morgan AG. The move is likely to increase operational efficiency as operating through a single entity reduces the total capital needed.
JPMorgan believes the combined operation will “be among the five largest banking legal entities in Germany”. Additionally, it claims the combined entity, with total estimated capital of approximately 34 billion euros ($38.51 billion), will be among the top 20 firms under European Central Bank’s (ECB) supervision.
Wall Street’s Take
Following the release of JPMorgan’s latest earnings report, Barclays analyst Jason Goldberg maintained a Buy rating on the stock but lowered his price target to $200 (37.85% upside potential) from $202.
Though JPMorgan’s expenses outlook surpassed analyst expectations, Goldberg believes these investments will reap benefits going forward.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 10 Buys, 7 Holds, and 1 Sell. The average JPMorgan price target of $178.39 implies 23% upside potential. Shares have gained 12.4% over the past year.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 88% Bullish on JPM, compared to a sector average of 71%.
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