JPMorgan Chase & Co (JPM): Pre-Earnings Analysis

My analysis focuses on the company’s stock price reaction during the last 12 earnings announcements. Moreover, also reporting the reactions only to the earnings announcement in which the company has reported EPS higher than expected or in which it has reported EPS lower than expected.

If an event has occurred often does not mean that repetition is guaranteed in the future.

This analysis could be useful for the following reasons:

  • Understand if it is a company that often beats analysts’ expectations and see how the market reacts accordingly.
  • Understanding if when the company reacts with a positive opening then closes the day at an even higher price or if it reverses the direction and closes at a lower price (and viceversa).
  • Have an idea of how much the stock price goes up on average when it reacts positively and how much the stock price goes down when it reacts negatively.
  • Identify those stocks with the best risk-return ratio, ie stocks that have average positive reactions 2 or 3 times greater than average negative reactions.
  • If you are a day trader you may find interesting those stocks that show a historically high volatility during these days.
  • Know how the price of the stock reacts within 5 or 20 days after the publication of the quarterly report.

JPMorgan Chase & Co. (JPM)


Summary

  • JPM reported higher EPS than analyst expectations in 91,67% of cases.
  • JPM reacted by opening the day in a positive way in 75,00% of cases, with an average performance at the opening of the 0,50%
  • JPM had a positive performance after 20 days in 75,00% of cases, with an average 20-day performance of 2,62%
  • On days when JPM reacts positively at the opening, in 77,78% of cases it closes the day at an even lower price.
  • On days when JPM reacts negatively at the opening, in 100,00% of cases it closes the day at an even higher price.
  • Average Gain: +1,74%
  • Average Loss: -1,08%
  • Average Volatility: 3,01%
  • Earnings date: October 15, 2019 (Before-Market-Open)

Full description

JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City.

In the last 12 earnings announcements JPM reported EPS higher than expected on 11 occasions out of 12 ( 91,67% ).

JPM stock price reacted positively (by opening up) to these earnings announcements 9 times out of 12 ( 75,00% ) opening with an average variation of 0,50% .

JPM stock price reacted positively (by closing up) to these earnings announcements 5 times out of 12 ( 41,67% ) closing the day with an average gain of 1,74% on days when reacted positively and closing the day with an average loss of -1,08% on days when reacted negatively.

On days when JPM reacts positively at the opening, in 2 occasions out of 9 ( 22,22% ) it closes the day at an even higher price with an average gain during the day (from open to close) of 1,27% , while the remaining 7 occasions ( 77,78% ) closes at a lower price.

On days when JPM reacts negatively at the opening, in 0 occasions out of 3 ( 0,00% ) it closes the day at an even lower price.

During the last 12 earnings announcements JPM reacted with an average volatility of 3,01% throughout the day.

Regarding the performance of the stock in the next 5 and 20 days, JPM had an average variation of 0,79% in the following 5 days and 2,62% in the following 20 days.


Sources & Additional info

*Current and estimated EPS data from zacks.com
*Company information from wikipedia.com


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Legenda

The results are divided into 3 columns. In the first column the reactions to all 12 earnings announce are considered. In the second column only the reactions to the earnings announcement in which the company reported EPS higher than expected. In the third column only the reactions to the earnings announcement in which the company reported EPS lower than expected.

* EPS Surprise
– “Positive Op.”: Indicates the percentage of times the company has reported EPS higher than analysts’ expectations.

* Reaction (Open)
– “Positive Op.”: Indicates the percentage of times the stock price has reacted positively to the earnings report, by opening at a higher price than the closing of the previous day.
– “Avg. Ch. (%)”: Indicates the average performance of the stock price at the opening.

* Reaction (Close)
– “Positive Op.”: Indicates the percentage of times the stock price has reacted positively to the earnings report, by closing at a higher price than the closing of the previous day.
– “Avg. Ch. + (%)”: Indicates the average performance on days when the stock price reacted positively.
– “Avg. Ch. – (%)”: Indicates the average performance on days when the stock price reacted negatively.

* Reaction (From Open to Close)
– “Positive Op.”: Indicates the percentage of times the stock price has reacted with a positive performance starting from the opening price up to the closing price.
– “Avg. Ch. (%)”: Indicates how the stock price is moving on average starting from the opening price up to the closing price of the same day.

* Reaction (5 Days After)
– “Positive Op.”: Indicates the number of times the company’s stock price reached a positive performance after 5 days the earnings announcement.
– “Avg. Ch.”: Indicates the 5-day average price performance of the stock from the day the earnings were announced.

* Reaction (20 Days After)
– “Positive Op.”: Indicates the number of times the company’s stock price reached a positive performance after 20 days the earnings announcement.
– “Avg. Ch.”: Indicates the average 20-day performance of the stock price starting from the day the earnings were announced.

* Reaction (Volatility)
– “Avg. Ch. (%)”: Indicates the amplitude (in %) of the fluctuations in the price of the stock in reaction to the earnings report (max – min).


This analysis focused on the moment before the publication of the quarterly report, if you are also interested in the analysis after the publication of the quarterly report I am waiting for you here.


DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.