Bove Upgrades Lehman (LEH) On Stronger Balance Sheet, Fuld Reappearance

Ladenburg Thalmann analyst Richard Bove upgrades Lehman from Sell to Neutral on the conviction that the firm has finally raised enough capital to shore up its balance sheet. Bove cautioned, however, that Lehman’s earnings outlook remained “uncertain” and forecast a net loss in 2008 ($3.19 per share). Bove also cut his target from $35 to $30.

The company’s hedging policies appear to still be ineffective. Plus, further writedowns may be possible concerning the company’s real estate related financial instruments.

Bove’s upgrade follows a good day yesterday, when shares rose 9% after CEO Dick Fuld finally emerged from his hideout and reassured investors that Lehman has a firm hand on the tiller.

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