JPMorgan: Better in Bite Sized Bits?

Goldman Sachs analyst Richard Ramsden and team today pondered whether JPMorgan Chase (JPM) would be better off broken up:

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JPMorgan is somewhat unique among the money center banks, as nearly all of its business lines are top quartile performers. This is a double-edged sword as it suggests synergies from JPMorgan's business model do exist but also implies enough strength to operate as standalone companies. Our analysis suggests that a breakup – into two or four parts – could unlock value in most scenarios, although the range of outcomes we assessed is wide, at 5-25% potential upside. Upside is sensitive to the magnitude of the multiple rerating, the speed and size of potential capital returns from each standalone business, and reductions in estimated synergies.

With the market getting hammered, however, no one’s willing to give JPMorgan the benefit of the doubt. Its shares have dropped 3% to $60.63 at 1:25 p.m. today, while Bank of America (BAC) has fallen 3% to $17.36 and Citigroup (C) is down 3.2% at $52.55.