Breaking News
Investing Pro 0
Donate to earthquake relief efforts in Turkey and Syria Donate

2 Bank Stocks Downgraded by Atlantic Equities Today

Stock Markets Oct 05, 2022 08:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2 Bank Stocks Downgraded by Atlantic Equities Today
 
GS
+0.15%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MS
-0.26%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BAC
-0.79%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WFC
+0.33%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
FRC
-1.98%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Senad Karaahmetovic

Atlantic Equities analysts downgraded two bank stocks today ahead of the Q3 earnings season that starts next week. The analysts cut ratings for Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), citing three key factors: declining investment banking activity, falling equity markets, and concern that trading estimates remain too optimistic.

Goldman is downgraded to Underweight from Neutral while Morgan Stanley’s new rating at Atlantic is Neutral (down from Overweight). New price targets for these two banking giants are $290 and $85 per share, down from $330 and $95, respectively.

“Combined, IB and trading account for c60% of revenues for Goldman Sachs and c50% for Morgan Stanley compared to c30% for the money-centre banks. In the financial crisis, a surge in recapitalisations boosted ECM and DCM activity, but many firms repaired their balance sheets during the pandemic, lowering upside risk for the IBs. FICC and Equities trading are also coming off two strong years while falling equity markets create obvious headwinds for wealth and asset management divisions,” the analysts explained in a client note.

They also noted that banks tend to underperform early in a recession before a strong outperformance period comes in the early stage of recovery.

“Although we are downgrading GS and MS, we retain our Overweight recommendations on BAC, WFC and FRC due to a combination of high interest rate sensitivity, strong expense management (leading to operating leverage), high quality credit profiles and reasonable valuations,” they concluded.

Shares of Goldman Sachs and Morgan Stanley both traded 1.5% lower in pre-open Wednesday.

2 Bank Stocks Downgraded by Atlantic Equities Today
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email