Another Firm Expects Goldman (GS) to Report Q3 Loss
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Rating Summary:
16 Buy, 23 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 33 | Down: 45 | New: 4
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Citigroup has finally caved. In a note Tuesday morning, Citi said it now expects Goldman Sachs (NYSE: GS) to report a third-quarter loss of 65 cents per share, down from prior expectations for earnings of 10 cents per share.
Citi made the call "given 3Q weakness across trading and investment banking that extended through the end of Sept, further equity market declines and wider credit spreads..."
But not too much downside might be left; Citi sees the loss as already baked into Goldman's stock price.
Included in the third-quarter outlook is about 15 cents of drag. Items include "a $300 mil DVA gain given wider credit spreads on Goldman’s fair valued liabilities (17c benefit to our numbers) and also includes $300 mil of combined severance charges and impact from the UK bank levy (worth ~30c drag)." Without those items, Citi's loss expectation narrows to 50 cents per share.
On Goldman's call, Citi will be looking for color on its $1.2 billion cost savings initiative, as well as insight into the Volcker rule.
Goldman is expected to report before the market opens on October 18th. Shares are trading about 1 percent lower early Tuesday.
Citi made the call "given 3Q weakness across trading and investment banking that extended through the end of Sept, further equity market declines and wider credit spreads..."
But not too much downside might be left; Citi sees the loss as already baked into Goldman's stock price.
Included in the third-quarter outlook is about 15 cents of drag. Items include "a $300 mil DVA gain given wider credit spreads on Goldman’s fair valued liabilities (17c benefit to our numbers) and also includes $300 mil of combined severance charges and impact from the UK bank levy (worth ~30c drag)." Without those items, Citi's loss expectation narrows to 50 cents per share.
On Goldman's call, Citi will be looking for color on its $1.2 billion cost savings initiative, as well as insight into the Volcker rule.
Goldman is expected to report before the market opens on October 18th. Shares are trading about 1 percent lower early Tuesday.
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