Nomura Securities on U.S. Capital Markets: Raising Estimates: Better FICC and Asset Prices

Nomura Securities on U.S. Capital Markets: Raising estimates: better FICC and asset prices

Analyst, Glenn Schorr, said, "Given the reasonably solid start to 2012, we adjusted 1Q12 and out year estimates higher for the brokers, universal banks, and asset managers and tweaked estimates for the trust banks. Specifically for FICC, we think 1Q12 revenue levels are trending well above 2H2011 levels, but are still below 1Q11 (we have baked in 10-15% below 1Q11 levels), but we think March will be the swing vote on whether 1Q12 will be a solid or strong quarter for capital markets revenues. Even after the solid rally so far this year, financials continue to trade at historically low multiples, with most of the brokers and universal banks at discounts to tangible book value. Among the brokers and universal banks, we favor C, JPM and GS. Among the asset managers we like IVZ (our top pick) and BLK. The trust banks remain our least favorite group given ongoing topline/ model pressures.

Goldman Sachs (NYSE: GS): 2012E EPS from $11.00 to $12.00; PT from $130 to $135

Morgan Stanley (NYSE: MS): 2012E EPS from $1.55 to $1.62; PT $20

BofA (NYSE: BAC): 2012E EPS from $0.75 to $0.72; 2013E from $1.15 to $1.06; PT from $8 to $9

Citi (NYSE: C): 2012E EPS from $3.75 to $4.03; 2013E from $4.40 to $4.60 ; PT from $34 to $41

JPMorgan (NYSE: JPM): 2012E EPS from $4.50 to $4.70; 2013 from $5.30 to $5.35; PT from $41 to $48

Bank of NY (NYSE: BK): 2012E EPS from $2.10 to $2.24; 2013 from $2.35 to $2.50; PT from $22 to $23

Northern Trust (Nasdaq: NTRS): 2012E EPS from $2.90 to $2.92; 2013E from $3.30 to $3.37; PT from $41 to $45

State Street (NYSE: STT): 2012E EPS from $3.60 to $3.86, 2013E from $4.35 to $4.45; PT from $40 to $45

Franklin (NYSE: BEN): 2012E EPS from $9.08 to $9.26; 2013E from $9.89 to $10.39; PT from $118 to $124

BlackRock (NYSE: BLK): 2013E EPS from $15.14 to $15.60; PT from $212 to $218

Invesco (NYSE: IVZ): 2012E EPS from $1.85 to $1.89; 2013E from $2.16 to $2.25; PT from $28 to $29

Legg Mason (NYSE: LM): 2013E EPS from $2.26 to $2.35; PT from $27 to $28

T. Rowe Price (Nasdaq: TROW): 2012E EPS from $3.26 to $3.31; 2013E $3.85 to $3.95; PT from $61 to $63

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