U.S. bank stocks could again face investor pressure on Thursday after Lehman Brothers took an ax to profit estimates and target prices of its brokerage peer group, including Goldman Sachs, Morgan Stanley, Merrill Lynch and Bear Stearns.
Analyst Roger Freeman trimmed his share price estimates for Goldman, to $214 (U.S.); for Morgan Stanley, to $81; for Merrill, to $106; and for Bear Stearns, to $142.
He has “equal-weight” ratings on Goldman and Morgan Stanley, and “overweight” ratings on Merrill and Bear Stearns.
“Third-quarter earnings will be significantly impacted by the dislocation in the credit and asset-backed and mortgage markets,” he writes, halving his third-quarter estimate for Bear Stearns to $1.45 a share from $3.28.
He also trimmed Goldman to $4.26 a share from $4.47; for Merrill, to $1.74 from $1.90; and for Morgan Stanley, to $1.43 from $1.80.
