Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com -- JPMorgan analysts say Middle East events are having limited direct earnings impact on global banks, as the region’s overall contribution to group earnings remains modest despite being a growth area for most diversified institutions.
The firm notes that global banks maintain wholesale operations rather than domestic retail presence in the region, suggesting higher volatility could benefit trading revenues at investment banking-focused institutions.
JPMorgan expresses preference for European investment banks over their U.S. counterparts, citing valuation differences.
JPMorgan ranks Barclays as its top global investment bank pick. The firm notes BARC trades at 7.1x price-to-earnings ratio for 2027 estimates.
JPMorgan identifies Barclays as a stock where the market appears to have overreacted from a share price perspective.
Barclays is facing a lawsuit from Tricolor Holdings noteholders alleging fraud and is also among the lenders exposed to the collapsed UK mortgage firm, Market Financial Solutions Ltd.
Deutsche Bank secures the second position in JPMorgan’s pecking order. The German lender trades at 7.6x P/E for 2027 estimates. JPMorgan views DBK as another stock where market reaction seems excessive.
In recent developments, Deutsche Bank had its outlook revised to positive by S&P Global Ratings and its deposit outlook changed to positive by Moody’s, though its locations were also raided by German police as part of a money laundering investigation.
Beyond the top two names, JPMorgan also highlights several other European lenders as attractive. Standard Chartered, Société Générale, UBS, BNP Paribas and HSBC all feature in the firm’s preferred list of global investment banks.
Meanwhile, U.S. peers appear significantly more expensive. Morgan Stanley trades at about 14.4x price-to-earnings for 2027 estimates, while Goldman Sachs trades at roughly 14.9x, both above the valuation levels of their European counterparts, JPMorgan said.
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