Tuesday, December 13, 2011

"Bove Slashes Goldman Sachs Earnings Estimate by 66%" (GS)

Uh oh, Richard X, is going to get a talking to.
The stock is down 4.11% at $94-even.

From Breakout:
If Dick Bove wasn't already the most polarizing analyst in the Financial sector, this just might clinch it.
The Rochdale Securities bank analyst just slashed his fourth quarter EPS estimate for Goldman Sachs (GS) by 66% to $0.79. That's a full 70% below the current FactSet consensus of $2.61 a share, and comes at a time when shares of Goldman are down more than 40% for the year.

"It just doesn't look like there is enough business out there to allow Goldman to come anywhere close to where street consensus estimates are for the company," Bove says in the attached video.

As he sees, almost everything is going poorly for the investment banks, and not just Goldman Sachs. In fact, he took his clever to Morgan Stanley's (MS) Q4 estimates last week to the tune of 50% on the assumption that the fourth quarter is turning out to be worse than Q3.

Wall Street has been lowering earnings estimates as faith in Q4 is diminishing. But Bove has moved from slightly below consensus to an outlier with this move. According to FactSet, the consensus for Goldman's Q4 20011 EPS was $6.00 a year ago.

"Trading activity has slowed down dramatically, there's been a big drop in investment banking activity," Bove explains. "Mergers and acquisitions are down 10-15%, new equity offerings are down 15%, trading in things like governments and agenices have fallen off dramatically, trading in commodities is way down."...MORE