Shares of J.P. Morgan & Co. rose modestly in a down market Tuesday after two key analysts upgraded the stock.

Keefe, Bruyette & Woods Inc. and Merrill Lynch & Co. cited Morgan's announcement that its profits were "significantly ahead" of the average monthly pace of last year's quarter, thanks to gains in investment banking and services to wealthy clients.

David S. Berry, an analyst at Keefe Bruyette & Woods, raised his rating on the stock to "attractive," from "market performer," and posted a first-quarter earnings estimate of $3 a share, well above the $2.32 consensus. He also raised his 2000 earnings estimates to $11, from $10, and his 2001 estimates to $12, from $11.

Judah Kraushaar, an analyst at Merrill, raised his recommendation on the banking company to "accumulate/buy," from "neutral/buy," and raised his 2000 earnings estimate to $10.55, from $9.70, and his 2001 estimate to $11.80, from $10.85. Mr. Kraushaar said he raised his rating because he expects Morgan to deliver strong first- quarter earnings, and because it is moving ahead on the e-commerce front and is undervalued when compared with other broker-dealers.

Mr. Berry noted the company's investment banking and capital markets activities, as well as its new initiatives into e-commerce.

On Monday, J.P. Morgan unveiled a technology-oriented private banking service, which is expected to attract new customers.

"J.P. Morgan has been somewhat sensitive to the notion that it has not kept up with the 'New Economy,' " Mr. Kraushaar wrote in his note to clients, "but its new private banking service shows great innovation and market leadership."

The analysts said J.P. Morgan is undervalued because it shares are treated like those of its commercial banking peers, even though its business more closely resembles an that of an investment bank or broker-dealer.

Mr. Kraushaar pointed out that Goldman Sachs and Morgan Stanley Dean Witter trade at 20 times 2000 earnings-per-share estimates. J.P. Morgan's multiple is half that. "The firm may be poised for a partial catch-up move, especially if it can show rising returns on equity less distorted by one-time items."

Shares of J.P. Morgan rose 93.75 cents, or 0.84% on Tuesday, to $111.0625.

Elsewhere, shares of Fifth Third Bancorp rose 5.3%, to $48.4375 on Tuesday, while most other bank stocks continued to languish. "Fifth Third is usually at the front of a stock price recovery," said Bradley Vander Ploeg, an analyst at U.S. Bancorp Piper Jaffray. Fifth Third stock "has been beaten up more than the other bank stocks, so it does not surprise me that they are leading the group up."

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