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Aug 18 (Reuters) - Fox-Pitt, Kelton lowered its third-quarter earnings estimate on Goldman Sachs Group Inc GS.N by 40 percent to $1.95 a share, to reflect weaker-than-expected results across the board and bigger write-downs than projected.
“Goldman is particularly vulnerable to more recent downturns in global equity markets, given its large position as a principal equity investor, equity flow franchise, Asian market participant, and proprietary trader,” analyst David Trone said in a note to clients.
Trone, who cut its price target on the stock to $195 from $210, said he expects Goldman’s total net write-downs at $2.1 billion.
The analyst said he expects a decline in the bank’s businesses including equity trading and commodities, principal investment portfolio, securities services, rates and currencies, fixed income and investment banking.
Trone lowered his fourth-quarter earnings estimate to $4.40 from $5.25 a share, and cut his 2009 estimate to $16.01 from $17.19 a share, reflecting a “presumed extension of capital markets weakness.”
“While our investment bank and brokers universe looks quite oversold to us, as a practical matter, we continue to recommend caution for now, given continued negative momentum in the macro-economic backdrop,” Trone said. (Reporting by Eric Yep in Bangalore; Editing by Jarshad Kakkrakandy)
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