Yesterday JPMorgan released a note saying it was upgrading troubled Bank of America from underweight to neutral.
They’ll get no thanks for that, as today Bank of America’s banking analyst Guy Moszkowski has downgraded every other U.S. bank. [via ZeroHedge]
JPMorgan, Goldman Sachs, Morgan Stanley and Citigroup were all downgraded by Bank of America.
From the report [BofA via Fins]:
“JPM: Lowering 3Q11E to $1.07 from $1.30 (cons. $1.24); weaker trading (-$0.03) and IB revenues (-$0.02) drive negative operating leverage (-$0.05). Weaker NIM, lower reserve release (Cards, Mortgage), and PE markdowns drive remainder of EPS cuts (-$0.15), partially offset by stronger mortgage refi activity (+$.02).”
“Lowering 3Q forecasts, POs on magnified seasonal decline due to heightened volatility, which has been particularly difficult to manage following S&P US-debt downgrade. Firms likely saw sizable inventory hits; partially offset by better equity trading, particularly in cash, though derivatives challenged given volatility spike. IB weaker as well, as volatility dampened deal appetite. GS PO to $148 from $153, MS to $25 from $26; JPM to $51 from $55; C to $50 from $53.
3Q Highlights: Card credit cont to improve; strong mortgage refinancing activity; cash equity trading resilient in seasonally slow summer, particularly in Retail.
3Q Lowlights: Challenges for FICC, Equity derivatives as volatility spikes; S&P US-debt downgrade; Europe concerns extend to France; IB activity weak across M&A and underwriting. Significant declines in equity, credit markets; recessionary concerns escalate.
Potential catalysts: Germany, France propose viable solutions to contain Eurodebt issues; Europe bank funding concerns abate; resolution to mortgage litigation; better macro indicators, suggesting recession less likely.”