(AOF) – JPMorgan raised its price target from $ 40.50 to $ 43.50 and confirmed its recommendation to Overweight on Bank of America as part of an industry study following first quarter results. The research firm continues to recommend the stocks of major banks and expects to outperform as the economy recovers. He observes that consumer spending continues to improve each month, which should benefit commissions.
The broker also notes that the activity of investment banking slowed down sharply in April compared to a very high first quarter, in particular due to the drop in SPAC launches (-92% to 3 billion). However, the analyst adds that the high number of mergers and acquisitions announced and the very high number of IPOs are positive for the outlook.
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Cascading downsizing
In the United States and Europe, investment banks had put their workforce reduction plans on hold. However, faced with a surge in the cost of unpaid debts, these establishments will have to reduce their staff. Even if, in the year 2020, some analysts estimate that the revenues of the twelve major global investment banks should jump 25% to more than 188 billion dollars. S&P Global Ratings considers 2021 to be even tougher than 2009.
European banks are the most active in terms of workforce reduction. In the third quarter, front office staff fell by 5% in Europe. The equity trades were the most affected.
Commerzbank, which posted losses of 162 million euros between January and September following provisions to deal with the crisis and restructuring charges, could cut around 10,000 jobs. This is almost as much as its rival, Deutsche Bank, which will reduce its workforce from 87,000 to 74,000 jobs by 2022.
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