Credit Suisse Sees Mixed Q2 Results For Investment Banks, Trims View
Robust condition of capital markets and advisory services for investment banks may be offset in second-quarter results by a weaker environment for trading, an analyst said Monday.
Bolu expects results to reveal the strongest equity capital market volumes since 2010 and the best quarter since 2007 for mergers and acquisitions.
But muted conditions for trading and a lack of client appetite for risk will hold back overall results, Bolu said. Other difficulties include controlling operating expenses and litigation in the form of both legacy costs, as well as probes into foreign exchange and high-frequency trading.
Bolu maintained an Outperform rating on Goldman Sach and $185 target, but cut his second-quarter earnings estimate to $2.95 per share, from $3.11. Bolu cited higher-than-expected expense mainly in the form of litigation costs, as well as weak revenue from fixed-income trading.
On Morgan Stanley, Bolu maintained a Neutral rating and $33 target while cutting his earnings forecast to $0.52 per share, from $0.59, for the upcoming earnings report. The action was spurred by lower revenue expectations and the impact of preferred shares issued in the period, Bolu said.
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|Dec 2014||Guggenheim Securities||Initiates Coverage on||Buy|
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