J.P. Morgan Chase & Co.’s stock was downgraded Monday by Citigroup analyst Keith Horowitz, who said he was no longer bullish at current levels as he believes investors and analysts are a bit too optimistic. He downgraded the stock to neutral, after being at buy since April 2014. Horowitz believes the banking giant is one of the most favored among buy side and sell side analysts, with more than three quarters of analysts rating it the equivalent of a buy. As a result, he said he believes 2017 and 2018 earnings estimates are about 2% too high. “In this environment, you want to rent not buy the banks,” Horowitz wrote in a note to clients. “In a prolonged low rate-growth environment, we believe the banks are more trading range stocks and we believe the time to add to positions is when sentiment is negative.” The stock was up 0.2% in morning trade. It has run up 7.4% over the past month to close Friday in positive territory for the year for the first time. Meanwhile, the Dow Jones Industrial Average has gained 6.6% year to date.
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