March 10, 2008 / 2:15 PM / 9 years ago

Citi sees $9 bln writedowns at U.S. investment banks

<p>A man is reflected in the Citibank logo in Tokyo November 5, 2007. 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.Toru Hanai</p>

(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

New Old

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

Reporting by Amulya Nagaraj and Aditi Samajpati in Bangalore; Editing by Amitha Rajan, Bernard Orr

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below