Dire EPS Estimates On Goldman Sachs (GS) May Have Gone Too Far - Gasparino
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On the same day that Meredith Whitney cut estimates for Goldman Sachs Group Inc. (NYSE: GS), FOX Business Network's Charles Gasparino said that the feeling among the big bank's rivals see this as an overreaction.
Earnings estimates for Goldman have been down 50 percent since May, and Gasparino said that people inside of Goldman think that the results may come down even more before they are actually released.
"The reason is obviously the SEC settlement is out there, lousy month for trading, lousy month in the equity business," Gasparino said. "A lot of people are baking in this SEC settlement inside the earnings even though they haven't paid it and no one knows what it's going to be."
However, Gasparino talked to traders on the floor from other banks and they don't see a fall in earnings of that magnitude, citing that the settlement with the Securities and Exchange Commission might not come until September, and that theses analysts are simply underestimating the ability of Goldman to trade.
"Goldman knows how to trade…people are discounting their ability to trade out of this quarter, and they are discounting it way too much. You talk to competitors; they say these analysts are going way over the top. Analysts are taking a dimmer view of Goldman more than anybody else."
Earlier on Thursday, Meredith Whitney's second-quarter earnings estimate for Goldman was slashed from $4.75 per share to $1.70 per share, giving her a much worse view of the firm that the market consensus of $2.34. Whitney’s third-quarter estimate was also cut to $3.77 per share from $4.24 per share, compared to the consensus of $4.10 per share.
Goldman is scheduled to release its second-quarter results July 20. The stock closed on Thursday down 37 cents to $135.46.
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Earnings estimates for Goldman have been down 50 percent since May, and Gasparino said that people inside of Goldman think that the results may come down even more before they are actually released.
"The reason is obviously the SEC settlement is out there, lousy month for trading, lousy month in the equity business," Gasparino said. "A lot of people are baking in this SEC settlement inside the earnings even though they haven't paid it and no one knows what it's going to be."
However, Gasparino talked to traders on the floor from other banks and they don't see a fall in earnings of that magnitude, citing that the settlement with the Securities and Exchange Commission might not come until September, and that theses analysts are simply underestimating the ability of Goldman to trade.
"Goldman knows how to trade…people are discounting their ability to trade out of this quarter, and they are discounting it way too much. You talk to competitors; they say these analysts are going way over the top. Analysts are taking a dimmer view of Goldman more than anybody else."
Earlier on Thursday, Meredith Whitney's second-quarter earnings estimate for Goldman was slashed from $4.75 per share to $1.70 per share, giving her a much worse view of the firm that the market consensus of $2.34. Whitney’s third-quarter estimate was also cut to $3.77 per share from $4.24 per share, compared to the consensus of $4.10 per share.
Goldman is scheduled to release its second-quarter results July 20. The stock closed on Thursday down 37 cents to $135.46.
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