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Analysts across the board have been cutting Q3 earnings estimates for Goldman Sachs.Deutsche Bank analyst Michael Carrier just joined the party. He now expects Goldman to report a 25 cent per share loss versus his previous call for a 50 cent per share profit.
“The broker stocks have been under pressure due to the Euro sovereign issue (systemic fears) & weaker macro backdrop,” said Carrier.
He expects investment banking and trading revenues to fall across the industry.
However, he doesn’t think you should necessarily sell. “[B]ut given significantly lowered expectations & valuations below TBV, we view these as priced in, & once we get some clarity around the Euro issue, we see meaningful upside.”
He reduced his full year 2011 estimate for Goldman to $6.45 per share from $8.00 per share. His 2012 estimate calls for $15 cents per share, down from $16 cents per share.
He’s not quite as negative on Morgan Stanley. He reduced his Q3 earnings estimate to 30 cents per share, down from 40 cents.
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