Why JPMorgan Chase & Co. Shares Could Pop 20%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of JPMorgan Chase  (NYSE: JPM  ) gained slightly in pre-market trading Monday after FBR Capital upgraded the banking giant from market perform to outperform.

So what: Along with the upgrade, analyst Paul Miller boosted his price target to $70 (from $55), representing about 20% worth of upside to Friday's close. So while momentum traders might be turned off by JPMorgan's year-to-date price sluggishness, Miller's call could reflect a sense on Wall Street that the bank's growth prospects are becoming too cheap to pass up.

Now what: FBR reiterated its operating earnings-per-share outlook for JPMorgan of $5.77 in 2014 and $5.95 in 2015. "Though we had remained on the sidelines given a lack of near-term earnings growth or identifiable catalysts, we now believe investor expectations have been reset and JPM shares should benefit over the next year as the economy and the prospects for positive catalysts improve," said Miller. When you couple that upbeat outlook with JPMorgan's cheapish single-digit forward P/E, it's tough to disagree with FBR's bullishness.

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