Market Overview

Credit Suisse Sees Mixed Q2 Results For Investment Banks, Trims View

Related GS
Lloyd Blankfein: This Could Very Well Be The Chinese Century
Lloyd Blankfein On The State Of U.S. Economy, Slump In Oil Prices
Most Americans Likely Not Hiking Holiday Budgets (Fox Business)

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.

Credit Suisse's Christian Bolu trimmed eight percent from his second-quarter earnings estimates for both Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS).

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.

Latest Ratings for GS

DateFirmActionFromTo
Dec 2014Guggenheim SecuritiesInitiates Coverage onBuy
Dec 2014SusquehannaDowngradesPositiveNeutral
Oct 2014MacquarieMaintainsNeutral

View More Analyst Ratings for GS
View the Latest Analyst Ratings

Posted-In: Christian Bolu Credit SuisseAnalyst Color Price Target Reiteration Analyst Ratings Trading Ideas

 

Related Articles (GS + MS)

Around the Web, We're Loving...

Get Benzinga's Newsletters