JPMorgan unveils top bank picks after analyzing earnings results

A Bank of America customer uses a bank card
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JPMorgan's research group shared its top large cap bank stock ideas in a note to clients Wednesday.

"Divergence persisted into the third quarter among regionals with some banks continuing to deliver better results than others," wrote analyst Vivek Juneja. "Bank stocks have done well recently, especially money centers, on hopes for a more hawkish Fed (with likely a new head plus more), plus some upside from regulatory and tax reforms."

The analyst gave his five key thoughts on the recent third-quarter results:

  1. "Earnings per share growth drivers will shift a little further towards share repurchases."
  2. "There are no signs of pick-up in loan growth into the forth quarter."
  3. "Banks are cutting costs more actively to offset weak revenue."
  4. "Banks are trying to grow fee revenues, but with mixed results."
  5. "Credit quality overall remains strong even with some seasoning of loans."

Here are three overweight-rated stocks recommended by JPMorgan, along with current price targets.