JPMorgan Customers Unlock Frozen Stake in Russian Firms

Starting April 5, JPMorgan Chase & Co. (NYSE: JPM) is allowing its customers to cancel their depositary receipts in Russian companies, Reuters reported citing sources.

Banks issue depositary receipts as certificates of shares in a foreign company that is listed on a local stock exchange.

The move comes a month after the London Stock Exchange (LSE) stopped trading in the depositary receipts of Russian firms, following a sharp decline in prices due to sanctions imposed on Russia by the U.S.

JPMorgan follows New York-based BNY Mellon (NYSE: BK) in restarting cancellations of depositary receipts in Russian enterprises.

Wall Street’s Take

On April 5, Piper Sandler (NYSE: PIPR) analyst Jeff Harte maintained a Buy rating on JPMorgan but reduced the price target to $165 from $187 (23.7% upside potential).

Harte has lowered the Q1 earnings estimates for the banking sector “to reflect capital markets-related revenue headwinds amid an increase in macro uncertainty and market volatility since Russia invaded Ukraine in late February.”

Overall, the stock has a Moderate Buy consensus rating based on nine Buys, six Holds and one Sell. JPM’s average price target of $172.06 implies 29% upside potential. Shares have lost 20.1% over the past six months.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 89% Bullish on JPMorgan, compared to the sector average of 69%.

Conclusion

Investors have the right to cancel their depositary receipts. However, banks banned cancellations after the Russian central bank imposed a ban on foreigners from selling shares in Russian companies. Depositary receipt issuers can restart cancellations now as the ban has been lifted. The move comes as a huge positive for investors who can liquidate their frozen holdings.

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