BofA 3Q Brokers Preview For Goldman Sachs And Morgan Stanley

Bank of America Merrill Lynch released a 3Q Brokers Preview report covering Goldman Sachs Group Inc. GS and Morgan Stanley MS on Thursday.

BofA lowered its estimates slightly for 3Q.  Analysts led by Michael Carrier expected “seasonally lighter results for the brokers in 3Q, given mixed capital markets activity and seasonality, though a bit better than feared given the pick-up in activity in September.”

Carrier lowered “3Q EPS estimates for GS to $3.30 from $3.40 (cons. $3.21) and MS to $0.55 from $0.56 (cons. $0.54).

According to the report, BofA expected “both GS and MS to post decent results, with any beats likely driven by stronger FICC trading or gains,” and “expenses and capital deployment to be roughly in-line with expectations.”

Concluding with comments on the sector, Carrier continued to “see some upside given signs of improving activity/revenues with a stronger economic backdrop. However, as valuations are nearing expected returns and some regulatory and legal risks remain, we see a more balanced risk/reward.”

Goldman Sachs Group Inc. recently traded at $181.28, down 2.87 percent.

Morgan Stanley recently traded at $33.34, down 3.36 percent.