In a note out this morning, Morgan Stanley analyst Betsy Graseck calls for a sharp rise in large cap U.S. banks.”Risk on trade buoys flows and positive marks driving up our 2012 EPS estimates by median 14 per cent,” she says. “Stronger consumer credit and mortgage servicer spread add incremental boost.”
The price target increases include jumps at Goldman Sachs, J.P. Morgan, Citi and Bank of America, up 28.4 per cent on average. Below, individual price changes.
- Goldman Sachs (GS): From $112 to $125
- J.P. Morgan (JPM): From $45 to $60
- Citigroup (C): From $30 to $42
- Bank of America (BAC): From $7 to $9
Graseck expects Goldman to achieve earnings of $11.10 this fiscal year, up 18 per cent from earlier estimates as the sales and trading business begins to recover. The company’s Institutional Client Services group, which houses Goldman’s equity and fixed income trading operations, fell 16 per cent during the final quarter of 2011 to $3.06 billion.