Goldman Expects Weakness in Shares of E*Trade (EFTC)
Goldman Sachs maintained a Neutral rating on E*TRADE (NASDAQ: ETFC) and cut its price target to $8.00 (from $9.00).
"We expect the stock to be weak given a meaningfully lower core EPS runrate, largely driven by NII [Net Interest Incom]. ETFC is guiding to sub-240 bp spread for 2012, with 10 bp incremental compression in 2013 which we think is optimistic," said analyst Alexander Blostein.
"Beyond NII headwinds, while ETFC’s risk management tools ultimately captured credit errors reported by one of its larger servicers, the timing of the realization (just last weekend) calls into question what other risk issues may exist, and we believe this question mark takes M&A off the table for the time being," added Blostein.
For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.
Shares of E*TRADE closed at $9.42 yesterday, with a 52 week range of $7.08-$11.69.
"We expect the stock to be weak given a meaningfully lower core EPS runrate, largely driven by NII [Net Interest Incom]. ETFC is guiding to sub-240 bp spread for 2012, with 10 bp incremental compression in 2013 which we think is optimistic," said analyst Alexander Blostein.
"Beyond NII headwinds, while ETFC’s risk management tools ultimately captured credit errors reported by one of its larger servicers, the timing of the realization (just last weekend) calls into question what other risk issues may exist, and we believe this question mark takes M&A off the table for the time being," added Blostein.
For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.
Shares of E*TRADE closed at $9.42 yesterday, with a 52 week range of $7.08-$11.69.