The Zacks Analyst Blog Highlights: JPMorgan Chase, BlackRock, Goldman Sachs Group, Bank of America and Boeing
CHICAGO, Nov. 19, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the JPMorgan Chase & Co. (NYSE:JPM-Free Report), BlackRock, Inc. (NYSE:BLK-Free Report), The Goldman Sachs Group, Inc. (NYSE:GS-Free Report), Bank of America Corp. (NYSE:BAC-Free Report) and The Boeing Company (NYSE:BA-Free Report).
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Here are highlights from Monday's Analyst Blog:
JPMorgan Settles Another Mortgage Issue
JPMorgan Chase & Co.'s (NYSE:JPM-Free Report) efforts to resolve mortgage-related issues have received a fresh boost. The bank has announced a settlement deal with nearly 21 institutional investors. The company will pay $4.5 billion to investors who incurred losses on 330 residential mortgage-backed securities (RMBS) trusts issued by JPMorgan and Bears Stearns Cos.
Additionally, these RMBS were sold to the investors during 2005–2008. However, the compensation does not pertain to RMBS sold by Washington Mutual. Both Bears Stearns and Washington Mutual were acquired by JPMorgan in 2008.
The major institutional investors include BlackRock, Inc. (NYSE:BLK-Free Report), MetLife, Inc., Pacific Investment Management Company, LLC, The Goldman Sachs Group, Inc. (NYSE:GS-Free Report), Fannie Mae, Freddie Mac, Deutsche Bank AG, U.S. Bancorp, The TCW Group and Wilmington Trust Co.
According to the agreement, the investors have time until Jan 15, 2014 to agree to the deal, which can further be extended to Mar 15. Notably, the settlement awaits the approval of the court.
JPMorgan has now become the third financial firm to agree to a settlement deal with institutional investors over the sale of risky RMBS preceding the financial crisis. Earlier in 2012, Residential Capital – the former mortgage lending division of Ally Financial – agreed to pay $7.3 billion to investors. Similarly, in 2011, Bank of America Corp. (NYSE:BAC-Free Report) declared an $8.5 billion settlement deal with 22 institutional investors, which is now awaiting court approval.
In the past few months, JPMorgan has settled various charges relating to the sale of home loans and MBS, its 'London Whale' debacle and alleged manipulation of electricity prices in California and the Midwest region, among others. However, the company still faces several lawsuits concerning the sale of risky MBS.
Hence, JPMorgan increased its litigation reserves by $9 billion to nearly $23 billion at the end of the third quarter. Additionally, the bank anticipates legal losses (over and above its existing litigation reserves) of about $5.7 billion as of Sep 30, 2013.
At present, JPMorgan carries a Zacks Rank #3 (Hold).
Orders Flow in for Boeing
The aerospace giant The Boeing Company (NYSE:BA-Free Report) won a sizeable contract on the first day of the Dubai Airshow on Sunday, sealing an approximately $25.2 billion deal at list prices with Etihad Airways for its revamped 777 long-haul jet.
Etihad has placed firm orders for 56 Boeing aircraft and the option to buy an additional 26. The Abu Dhabi carrier will be the launch customer of this 777X airplane and intends to buy both versions of the 777X, comprising 17 777-9X and 8 777-8X.
The Boeing 777-9X variant holds around 400 seats and is considered as the largest and most efficient twin-engine commercial jet in the world. The jet's fuel consumption is cut by as much as 12% and has 10% lower operating costs. This jet is expected to be the primary 777 version with deliveries starting from 2020. On the other hand, the 777-8X variation will be the most flexible commercial jet in the world and has a higher range capability than the existing 777.
The order also takes into consideration a further 30 787-10 Dreamliners, which will make Etihad the largest operator of that aircraft. Etihad Airways will now have a total of 71 787s on order and Boeing plans to start deliveries of these jets in 2018.
Plagued by a number of technical issues in recent times, this 787-10 contract would be a confidence booster for Boeing. This airplane is the third and longest member of the 787 family with higher passenger and cargo capacity. Moreover, this jetliner is expected to be 25% more efficient than airplanes of its size at present.
Apart from the launch of Boeing's latest incarnation of the 777 long-haul jet, the aerospace behemoth netted approximately $100 billion in orders at the Dubai Airshow on Sunday with three Middle Eastern airlines signing up to buy 225 of Boeing's new 777X jets. In fact, Boeing's total order value was twice that of its European rival Airbus, which captured 142 orders worth about $40 billion.
Of the major Gulf Arab carriers, apart from Etihad, Dubai-based Emirates Airline put orders for 150 of the planned Boeing 777X at a combined price tag of $55.6 billion. Boeing also received orders for 50 777X from Qatar Airways in a deal valued at $19 billion at list prices. Further, Flydubai, a budget carrier, committed to buy up to 111 Boeing single-aisle 737 aircraft.
The gradual recovery in the global economy is bringing in a steady improvement in passenger and freight traffic. As per the International Air Transport Association (IATA), global airline passengers will touch the 3.6 billion mark in 2016, expanding 5.3% per annum in the period 2012 to 2016.
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