![](https://investorshub.advfn.com/uicon/101242.png?cb=1468920947)
Monday, November 17, 2008 11:32:40 AM
Monday November 17, 9:48 am ET
(Reuters) - Bernstein Research analyst Brad Hintz became the latest to join the ranks of analysts expecting a fourth-quarter loss at Goldman Sachs (NYSE:GS - News), as he expects the company to be hurt by writedowns amid weak credit market conditions.
Hintz, who also slashed his earnings estimates on Morgan Stanley (NYSE:MS - News), expects the former investment banks to suffer as global economic conditions continue to deteriorate.
Separately, theflyonthewall.com reported that Citigroup cut its price target on Goldman shares to $125 from $150.
Shares of Goldman fell 5 percent before the bell, while those of Morgan Stanley slid 3 percent.
Bernstein's Hintz expects Goldman Sachs to post a fourth-quarter loss of 54 cents a share, hurt by writedowns related to its investments in Industrial and Commercial Bank of China Ltd (Shanghai:601398.SS - News; HKSE:1398.HK - News; ICBC) and its private equity holdings.
Goldman is likely to lose $800 million from its investment at ICBC, due to the company's declining equity value on the Hong Kong Stock Exchange, Hintz said.
Goldman may also face reduced fixed income sales and trading revenues due to the difficult credit market conditions, Hintz, who had earlier expected a fourth-quarter profit of $2.12 a share at the company, said in a note to clients.
Over the past two weeks, a slew of analysts at brokerages including Fox-Pitt Kelton and UBS have forecast that Goldman will post a fourth-quarter loss, which would be its first ever as a public company. The analysts' expectations for a loss range between $2.50 per share and 40 cents a share.
MORGAN TO OUTDO GOLDMAN?
"Because Morgan Stanley is less reliant on capital intensive trading revenues than Goldman Sachs, Bernstein expects Morgan Stanley's results will be stronger than Goldman's this quarter," Bernstein's Hintz said.
But he cut his fourth-quarter estimates on Morgan Stanley to 30 cents a share from $1.12 a share, citing a "difficult operating environment" during the quarter.
Hintz prefers Morgan Stanley over Goldman Sachs for its greater revenue diversification, lower reliance on capital intensive trading revenues and the earnings stability that its retail brokerage business provides.
The analyst has an "outperform" rating on Morgan Stanley, while he rates Goldman Sachs "market-perform."
Goldman Sachs and Morgan Stanley became bank holding companies regulated by the U.S. Federal Reserve in September, after Lehman Brothers (Other OTC:LEHMQ.PK - News) failed, Merrill Lynch (NYSE:MER - News) agreed to be bought and the financial markets spun out of control.
The change, effectively killing off the investment banking model that had dominated Wall Street for more than 20 years, enabled Goldman and Morgan Stanley to take deposits, gain easier access to financing and gave them more flexibility to buy retail banks.
On the investment banking front, the current quarter was weak for the two surviving securities firms with weak underwritting volumes, analyst Hintz said.
"The potential for negative marks remains real as hedge funds, banks and other institutions continue to de-lever their balance sheets," he said.
While mergers and acquisition advisory revenue is likely to hold up the quarter, it is not likely to offset the weakness from the underwriting side of the business, Hintz said.
Goldman shares closed at $66.73 Friday on the New York Stock Exchange, while those of Morgan Stanley closed at $12.03.
http://biz.yahoo.com/rb/081117/business_us_goldmansachs_research_bernstein.html?.v=3
Recent MS News
- Morgan Stanley Wealth Management Pulse Survey Reveals Mixed Sentiment Amid Hot Market and Cool Inflation • Business Wire • 07/17/2024 08:05:00 PM
- Tech Stocks May Lead Early Pullback On Wall Street • IH Market News • 07/17/2024 01:10:13 PM
- Tech-Led Decline in U.S. Index Futures Pre-Market, Oil Prices Steady After U.S. Inventory Drop • IH Market News • 07/17/2024 10:30:52 AM
- Dow Surges To New Record Closing High On Upbeat Earnings News • IH Market News • 07/16/2024 08:32:11 PM
- U.S. Stocks May See Further Upside In Early Trading • IH Market News • 07/16/2024 01:06:17 PM
- Morgan Stanley Second Quarter 2024 Earnings Results • Business Wire • 07/16/2024 11:30:00 AM
- US Index Futures Steady, Oil Prices Dip Amid China Slowdown, Key Earnings Reports Ahead • IH Market News • 07/16/2024 10:12:04 AM
- Eaton Vance Municipal Bond Fund Announces Measurement Period for Initial Conditional Tender Offer • Business Wire • 07/12/2024 08:05:00 PM
- Eaton Vance Municipal Bond Fund Announces Final Results of Tender Offer • Business Wire • 07/11/2024 08:27:00 PM
- Eaton Vance Municipal Bond Fund Announces Preliminary Results of Tender Offer • Business Wire • 07/10/2024 01:25:00 PM
- BP Slashes Profit Forecast by $700 Million; Morgan Stanley Predicts S&P 500 10% Drop, and More News • IH Market News • 07/09/2024 10:54:32 AM
- Morgan Stanley Announces 7.5 Cents Dividend Increase and Authorization of a Renewed $20 Billion Multi-Year Common Equity Share Repurchase Program • Business Wire • 06/28/2024 08:35:00 PM
- Nike Stock Drops 14% in Pre-Market; Nokia Acquires Infinera for $2.3 Billion, and More News • IH Market News • 06/28/2024 10:50:25 AM
- Morgan Stanley Wealth Management Announces Latest Game-Changing Addition to Suite of GenAI Tools • Business Wire • 06/26/2024 02:00:00 PM
- Morgan Stanley Energy Partners Completes Sale of Durango Permian to Kinetik Holdings • Business Wire • 06/25/2024 05:58:00 PM
- Morgan Stanley at Work Insights Spotlight Increasing Focus on Workplace Financial Benefits, With Equity Compensation Key • Business Wire • 06/24/2024 02:00:00 PM
- UPS Divests Coyote Logistics in $1.025 Billion Deal with RXO, Under Armour Agrees to $434 million Settlement, and More News • IH Market News • 06/24/2024 11:00:20 AM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 05:36:01 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 04:07:57 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 04:05:58 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 04:03:43 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 03:55:14 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 03:45:02 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 03:40:30 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 03:39:30 PM
Greenlite Ventures Completes Agreement with No Limit Technology • GRNL • Jul 19, 2024 10:00 AM
VAYK Expects Revenue from First Airbnb Property Starting from August • VAYK • Jul 18, 2024 9:00 AM
North Bay Resources Acquires Mt. Vernon Gold Mine, Sierra County, California, with Assays up to 4.8 oz. Au per Ton • NBRI • Jul 18, 2024 9:00 AM
Nightfood Holdings Signs Letter of Intent for All-Stock Acquisition of CarryOutSupplies.com • NGTF • Jul 17, 2024 1:00 PM
Kona Gold Beverages Reaches Out to Largest Debt Holder for Debt Purchase Negotiation • KGKG • Jul 17, 2024 9:00 AM
Avant Technologies Welcomes Back Former CEO with Eye Toward Future Growth and Expansion • AVAI • Jul 17, 2024 8:00 AM