The summer of discontent
This summer will go down in history as the summer of discontent…at least amongst analysts following the big banks!
Earlier this month, Credit Suisse downgraded Lehman from outperform to neutral. Earlier this week, analysts at Goldman Sachs issued a series of scathing reports taking aim at the nation’s brokers, issuing particularly negative assessments regarding Citigroup.
Today, Citigroup analysts retained a sell rating on shares of Barclays PLC and cut their target price by over 20 percent, suggesting that Barclays could need another $17 billion in financing. Then, analysts at Lehman Brothers pointed the finger at Merrill Lynch, forecasting that Merrill will write down about $5.4 billion in the second quarter.
With all of this bad news, it has to make you wonder… could analysts be trading jabs just to redirect attention away from the troubled positions of the companies they work for?
Tags: barclays, citigroup, downgrades, goldman sachs, lehman brothersRelated Stories
POSTED IN: Corporate, Economy, Investment, Market, News, Uncategorized
3 opinions for The summer of discontent
Robert Bassett
Jun 27, 2008 at 2:40 pm
It is clear that Bear Stearns was not the only financial service firm affected by the subprime meltdown. Over the past year financial shares have dropped over 40%. Citigroup, Merrill, and Lehman have seen almost a combined $270 billion in market value disappear, 2/3 of which from Citi. No one saw this coming. At the beginning of the 2007 4th quarter, Wall Street estimated about a 7% drop in profit for those investmen banks in the S&P500. By the end of the quarter expectations were at a decline of 152%; -235% was actually reported.
T Silver
Jun 27, 2008 at 5:01 pm
Thanks for the stats Robert. Looks like everyone underestimated the depth of losses associated with mortgage backed securities, collateralized debt obligations, etc…. and the risky loans they were backed by.
Cynthia Lee
Jun 30, 2008 at 6:28 am
I was under the impression CitiGroup has been doing poorly for quite some time now, and have actually seen it coming?
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