Magazine article American Banker

Mixed Trading as Chase Stock Rises, Others Fall

Magazine article American Banker

Mixed Trading as Chase Stock Rises, Others Fall

Article excerpt

Banks and other stocks rose and fell sharply on Friday in a session marked by some of the most volatile trading this year.

Amid the market turmoil, shares of Chase Manhattan Corp. were elevated by Donaldson, Lufkin & Jenrette Inc. to the firm's "recommended list" as a compelling buy.

The New York banking company's stock has considerable upside potential, Donaldson banking analyst Thomas K. Brown said in a new report. He has a 12-month target price of $160.

"Despite recent performance, Chase Manhattan continues to trade at a significant discount to its peers," said Mr. Brown. "We believe that the market is beginning to make a distinction between the relative valuation of banks based on earnings performance, franchise strength, and management quality."

Chase's shares rose $1, to $123.625, on a day when some banks regained ground lost in last Thursday's steep slide brought on by a rout in Asian and European markets. Other bank stocks fell further.

The Standard & Poor's bank index fell 0.28%, while the Dow Jones industrial average slipped 1.69%. The S&P 500 retreated 0.95%, and the Nasdaq Bank index surrendered 0.18%.

Mr. Brown dismissed the nearly 1.5% decline in Chase's stock on Thursday as not relevant to the company's overall picture.

Chase has enjoyed strong earnings growth fueled by revenues from corporate finance, trading, and fees from syndication and investment management and trust fees, noted Mr. Brown.

Diminished credit quality concerns also are working in Chase's favor. …

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