Credit Suisse Slashes Estimates/Targets on Goldman (GS), Morgan Stanley (MS); Reiterates Overweight
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Price: $158.72 +0.83%
Rating Summary:
7 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
7 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade GS Now!
Credit Suisse's Howard Chen reduced earnings estimates and price targets on Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) Tuesday morning.
While the analyst reiterated Outperform ratings on both stocks, Chen said slowing business trends during July and August, increased concerns related to the macro environment following S&P's downgrade of US debt, spreading fears of a double-dip recession and debt-contagion risks in the Eurozone will likely weigh. Chen argues there is no fundamental reason why these banks should be trading below tangible book value per share.
Credit Suisse now sees Goldman reporting third-quarter earnings of 95 cents per share, down sharply from a prior estimate of $2.71. The firm's FY12 estimate was reduced from $16.50 to $14 per share, and its FY13 estimate was reduced from $19 to $16.25 per share.
A consensus of analysts currently expect Goldman to report Q3 EPS of $2.66 and FY12 EPS of $16.50.
Chen's EPS estimate for Morgan Stanley moved from $2.75 to $2.50 for FY12 and from $3.20 to $3.00 for FY13.
The Street is looking for FY12 EPS of $2.72.
Chen reduced his price target on shares of Goldman Sachs from $170 to $155 and his target on Morgan Stanley from $33 to $29.
With Goldman shares down 2.6 percent to $104.28 Tuesday morning, Chen's new price target suggests potential upside of about 49 percent. The analyst's target on Morgan Stanley represents possible price appreciation of about 89 percent.
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While the analyst reiterated Outperform ratings on both stocks, Chen said slowing business trends during July and August, increased concerns related to the macro environment following S&P's downgrade of US debt, spreading fears of a double-dip recession and debt-contagion risks in the Eurozone will likely weigh. Chen argues there is no fundamental reason why these banks should be trading below tangible book value per share.
Credit Suisse now sees Goldman reporting third-quarter earnings of 95 cents per share, down sharply from a prior estimate of $2.71. The firm's FY12 estimate was reduced from $16.50 to $14 per share, and its FY13 estimate was reduced from $19 to $16.25 per share.
A consensus of analysts currently expect Goldman to report Q3 EPS of $2.66 and FY12 EPS of $16.50.
Chen's EPS estimate for Morgan Stanley moved from $2.75 to $2.50 for FY12 and from $3.20 to $3.00 for FY13.
The Street is looking for FY12 EPS of $2.72.
Chen reduced his price target on shares of Goldman Sachs from $170 to $155 and his target on Morgan Stanley from $33 to $29.
With Goldman shares down 2.6 percent to $104.28 Tuesday morning, Chen's new price target suggests potential upside of about 49 percent. The analyst's target on Morgan Stanley represents possible price appreciation of about 89 percent.
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