Woe is Merrill. Woe is John Thain.
It’s hard to fathom, given the $40+ billion Merrill has already written off, but Goldman Sachs analyst William Tanona downgrades Merrill (MER) from Hold to Sell on the expectation that Merrill will post more big writedowns. Tanona also added Merrill to Goldman’s “Conviction Sell” list and cut his target from $29 to $22:
Merrill currently trades at the highest price-to-book multiple in our large-cap brokerage universe, despite having some of the most significant exposures to troubled assets such as CDOs, mortgages and leveraged loans. With these markets still under pressure, we believe additional write-downs and book value deterioration will continue to plague the stock.
Shares of Merrill Lynch fell 4% in German trading on the news. Merrill has lost $51.8 billion during the credit crisis so far, second only to Citigroup (C), which has lost $55.1 billion.
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