Not the Time to Own Rate Sensitive Stocks, Sell Trust & E-Brokers (BK) (AMTD)
Goldman Sachs expects more weakness in Trust Banks and E-Broker and sees 18 percent downside in related stocks The Bank of New York Mellon Corporation (NYSE: BK) and TD Ameritrade Holding Corporation (NYSE: AMTD).
"Challenges in high-margin fees are likely to persist into 2013, putting estimates at risk, while valuations are at an 8% premium to history," said analyst Alexander Blostein.
He thinks Q4 pain will spill into 2013 and recommends investors sell related names. Among trusts, his top sell idea is Bank of New York Mellon.
"We believe 2013 EPS remains most at risk within the group as high margin revenues are shrinking and cost initiatives (around 50% already in the run-rate) are not keeping up," said Blostein.
For E-brokers, TD Ameritrade has the most downside given its high reinvestment risk in the group. Additional, volumes are off to a weak start in 2013, and equity and options down are down 7 percent year over year, noted the analyst.
For an analyst ratings summary and ratings history on Bank of New York Mellon (NYSE: BK) click here. For more ratings news on Bank of New York Mellon click here.
Shares of Bank of New York Mellon closed at $26.04 yesterday, with a 52 week range of $19.30-$27.32.
"Challenges in high-margin fees are likely to persist into 2013, putting estimates at risk, while valuations are at an 8% premium to history," said analyst Alexander Blostein.
He thinks Q4 pain will spill into 2013 and recommends investors sell related names. Among trusts, his top sell idea is Bank of New York Mellon.
"We believe 2013 EPS remains most at risk within the group as high margin revenues are shrinking and cost initiatives (around 50% already in the run-rate) are not keeping up," said Blostein.
For E-brokers, TD Ameritrade has the most downside given its high reinvestment risk in the group. Additional, volumes are off to a weak start in 2013, and equity and options down are down 7 percent year over year, noted the analyst.
For an analyst ratings summary and ratings history on Bank of New York Mellon (NYSE: BK) click here. For more ratings news on Bank of New York Mellon click here.
Shares of Bank of New York Mellon closed at $26.04 yesterday, with a 52 week range of $19.30-$27.32.