As they await regulatory and shareholder approval of their merger deal, Chase Manhattan Corp. and J.P. Morgan & Co. got another bullish evaluation Monday.

In a research report, David Berry, director of research at Keefe, Bruyette & Woods Inc., said the business mix of the combined J.P. Morgan Chase & Co. would bring low- to mid-double-digit earnings growth over time and greater-than-expected cost savings. He rated the combined company as a “buy,” anticipating a 64% increase in the combined company’s stock over time. Chase gained $2.50, or 6.25%, to $42.50. Morgan shares climbed $9.50, or 6.45%, to $156.75 on a generally positive day for financial stocks. The American Banker index of top 50 banks closed up 2.45%; and the index of 225 banks rose 2.85%.

Shares of both companies have been on the decline since they announced their plans to merge in mid-September. The decline, however, has been in keeping with a general slide in the stocks of other companies with a strong investment banking focus, including those of Morgan Stanley Dean Witter & Co. and Merrill Lynch & Co.

Wall Street remains skeptical whether the new J.P. Morgan Chase financial behemoth would be able to generate enough cost savings to justify the merger and sustain revenue growth. Mr. Berry said Chase has a strong track record handling large merger integrations. He also wrote that he expects “Chase will update the projected savings number before yearend.”

“Chase and Morgan are projecting that the new company will realize an incremental $1 billion in revenues over and above what the two companies would have achieved on their own absent the merger,” Mr. Berry wrote, calculating a net benefit of $400 million.

Mr. Berry added that, unlike other large U.S. banking companies, Chase Manhattan’s credit picture appears brighter. The company, a leader in loan syndication, has not warned of heavy losses from nonperforming loans. Last week, Bank of America — often neck and neck with Chase in the syndicated loan market — said it would have more than $1 billion in chargeoffs during the fourth quarter because of a rise in nonperforming loans.

Mr. Berry added that the combined Morgan Chase would be able to compete better with traditional Wall Street rivals such as Goldman Sachs Group, Morgan Stanley, and Merrill Lynch. One major advantage, he said, is that the combined firm’s capital would be $40 billion if measured at the end of the third quarter — roughly three times that of Goldman’s and Merrill’s and twice that of Morgan Stanley.

A spinoff of consumer operations — a subject of some speculation since the merger announcement — is not likely, Mr. Berry wrote.

Meanwhile, Gerard S. Cassidy, an analyst at Tucker Anthony Inc., cut his rating for FleetBoston to “buy” from “strong buy” and lowered his earning-per-share estimate for this year to $3.34 from $3.40 and to $3.40 from $3.70 for 2001. He said Fleet would not be able to withstand the current industrywide pressures on credit and capital market businesses, even though the company might suffer less than its peers.

Mark Fitzgibbon, an analyst at Sandler O’Neill & Partners Inc., also lowered his fourth-quarter estimate for FleetBoston to 83 cents from 85 cents and his 2001 estimates to $3.67 from $3.74, but reiterated his top “buy” rating. He wrote in his note that he believes the shares “remain undervalued.” FleetBoston remained unchanged at $35.9375.

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