UPDATE: Goldman Sachs Downgrades Charles Schwab to Neutral on Rate Headwinds

Goldman Sachs reduced its rating on Charles Schwab

from Buy to Neutral and lowered its price target from $14 to $15. Goldman Sachs commented, "We downgrade SCHW to Neutral from Buy after last week's Fed action and the subsequent decline in Agency RMBS yields. With over 70% of SCHW's securities portfolio in Agency RMBS, we now expect NIM headwinds to accelerate into 2013, which could be further exacerbated by increased pre-payments. We see SCHW's NIM declining to low 140's by the end of 2013, offsetting benefits of stronger equity markets." Charles Schwab closed at $13.94 on Tuesday.