Citi sees $9 bln writedowns at U.S. investment banks
(Reuters) - Citigroup forecast $9 billion of writedowns at U.S. investment banks in the first quarter of 2008, primarily driven by additional leveraged loan and mortgage-related losses.
The brokerage also cut its price target on several asset managers including Calamos Asset Management Inc (CLMS.O) and T. Rowe Price Group (TROW.O).
Calamos Asset's performance had deteriorated in early 2008 and Citigroup said it does not see a rapid turnaround in outflows during the year.
The brokerage said though T. Rowe was one of the best-positioned asset managers to drive meaningful earnings growth, the stock had priced in the prospects and investors should wait for a better entry point to become more aggressive on the shares.
Lehman Brothers Holdings Inc LEH.N was most exposed to residential mortgage deterioration during the last week of the quarter, analyst Prashant Bhatia wrote in a note to clients on Friday. He forecast writedowns of $1.6 billion at Lehman.
Bhatia also forecast writedowns of $3.2 billion at Goldman Sachs Group Inc (GS.N), $2.9 billion at Merrill Lynch & Co Inc MER.N and $1.2 billion at Morgan Stanley (MS.N).
Following are the price target changes made by Citigroup:
Stock Price Target Rating
T. Rowe Price $54 $60 Hold
Calamos $20 $24 Hold
Lazard (LAZ.N) $40 $50 Hold
Och-Ziff Capital (OZM.N) $25 $29 Hold
Franklin Resources (BEN.N) $102 $112 Hold
Fortress Investment (FIG.N) $14 $19 Hold
Legg Mason (LM.N) $85 $95 Buy
Blackstone Group (BX.N) $30 $33 Buy
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