Mike Mayo: JPM Worth More If Split Up

From Bloomberg:

JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets, should consider breaking up and selling businesses because its parts are worth one-third more than its market value, according to Mike Mayo, an analyst at CLSA Ltd.

While JPMorgan’s stock has outperformed its peers, the New York-based company has trailed the leading firms in its individual businesses, Mayo wrote in a note e-mailed today. JPMorgan executives must make the case at tomorrow’s investor conference for why the firm shouldn’t be broken up, he wrote.

“At what point does the conglomerate discount become so great that it encourages the company to take action?” Mayo wrote. “The stock seems undervalued, but the question is how and when this value gets realized?”

Wall Street expects the bank to earn $4.66 per share which means it’s going for 8.2 times earnings. Warren Buffett owns JPM on his personal account.

Posted by on February 27th, 2012 at 12:47 pm

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