GOLDMAN: We've Changed Our Mind On 6 Big Banks

Goldman Sachs Logo

Photo: flickr commons

Goldman revised its earnings estimates and price targets on six large cap banks today. It also tweaked estimates on 11 others.Some up. Some down. 

Analyst Richard Ramsden, on average, lowered third quarter earnings estimates by 8%.

From the note:

Unlike in 2008, we believe this time it is not about capital, but about a weakening macro picture and a sovereign crisis in which no clear resolution appears in sight, which we think is why every single bank we cover has underperformed the broader markets. One would have thought the market would reward those with strong balance sheets and robust capital positions, but it has not, which signals those are not the key issues this time.

Ramsden was “more negative for capital market focused banks and more positive for banks with strong mortgage banking operations.”

J.P. Morgan Chase and Co.

  • Current Price: $31.61
  • New Price Target: $45.00
  • Old Price Target: $49.00
  • Reason for Change: Expecting a decline in markets revenue by 30%, or around $1billion.

Source: Goldman Sachs & Co.

Bank of America Co.

  • Current Price: $6.46
  • New Price Target: $9.00
  • Old Price Target: $10.00
  • Reason for Change: Net interest margins will continue to fall in the third quarter of 2011 as rates shift increasingly rapidly.

Source: Goldman Sachs & Co.

Citigroup Inc.

  • Current Price: $26.92
  • New Price Target: $35.00
  • Old Price Target: $41.00
  • Reason for Change: Expecting full-year 2011 and 2012 earnings to fall 11% and 9% below prior estimates, respectively.

Source: Goldman Sachs & Co.

Wells Fargo & Co.

  • Current Price: $25.18
  • New Price Target: $34.00
  • Old Price Target: $33.00
  • Reason for Change: Current low rate environment is increasing refinance demand for Wells Fargo.

Source: Goldman Sachs & Co.

PNC Financial Services

  • Current Price: $49.47
  • New Price Target: $57.00
  • Old Price Target: $56.00
  • Reason for Change: Credit quality in the third quarter continues to improve. Home equity, education, auto and small business lending all increased in July.

Source: Goldman Sachs & Co.

U.S. Bancorp

  • Current Price: $24.07
  • New Price Target: $29.00
  • Old Price Target: $28.00
  • Reason for Change: Loan growth continues to strengthen and in the third quarter, U.S. Bancorp expects to see even greater growth - north of 1%.

Source: Goldman Sachs & Co.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.