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Sector Update: Financial Shares Lower at Mid-Day - JPMorgan Chase Revenue May Fall as Much as $3 Bln Next Year: BernsteinBY Midnight Trader
— 2:10 PM ET 12/02/2009
02:10 PM Eastern Standard Time, 12/02/2009 (MidnightTrader) -- Dow Jones U.S. Financials Index: -1.47 (-0.54%) at 269.86

Top Financial Stocks
JPM: -1.11%
BAC: -1.64%
WFC: -2.11%
GS: -0.85%
Financial shares are lower in mid-day trading. JPMorgan Chase (JPM

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) is lower after Sanford C. Bernstein estimated revenue could fall as much as $3 billion next year if new regulations force most of its derivative transactions onto an exchange. Bank of Ireland (IRE) is down fractionally despite a Goldman Sachs (GS

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) upgrade. SunTrust Banks (STI

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) is firmer, while BB&T (BBT

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) is higher following Credit Suisse upgrades.

JPMorgan Chase (JPM

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) estimates revenue could fall as much as $3 billion next year if new regulations force most of its derivative transactions onto an exchange, according to research firm Sanford C. Bernstein. The bank, the largest derivatives dealer on Wall Street, could take an EPS hit of $0.13 to $0.20 in 2010 if proposed derivatives rules becomes law, the analysts estimated after speaking Tuesday with Steve Black, executive chairman of JPMorgan's (JPM

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) investment bank. The calculations are based on the bank's worst-case scenario for additional regulation and the bulk of its privately traded derivatives contracts moving to an exchange. Bernstein's current estimate for JPMorgan's (JPM

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) 2010 EPS is $3.20.

Goldman Sachs (GS

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) raised Bank of Ireland to Buy from Neutral, according to MarketWatch.com. Goldman said Bank of Ireland's share price has dropped 88% from its peak in 2007 and that, while the bank still faces significant uncertainties, the risk/reward balance is skewed to the upside, the report said.

SunTrust Banks (STI

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) was upgraded to "outperform" at Credit Suisse, while BB&T (BBT

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) was raised to Neutral. It said STI "is supported by its strength of footprint, which supports stronger organic deposit / loan growth. Additionally, we estimate the south-east region (vs.-Atlantic and mid-West) and most consumer loan classes will recover earlier and faster," according to Marketwatch.com. It forecasted for BBT "$4 of normalized forward EPS, which implies that BBT is trading at 6.2x our normalized EPS estimate. As we forecast a normalized PE multiple of 12-13x, we believe the stock could trade up to $50, and has roughly 98% upside by mid-2012 (31% annualized return," MarketWatch.com reported.

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