UPDATE 1-RESEARCH ALERT-Punk Ziegel cuts Bear Stearns target

jueves 15 de noviembre de 2007 11:22 CET
 

(Adds details, analysts' comments, background)

Nov 15 (Reuters) - Punk Ziegel analyst Richard Bove cut his price target on Bear Stearns Cos Inc BSC.N to $109 from $120 and said his "market perform" rating on the stock reflected the possibility that the fifth-largest U.S. investment bank may still be acquired.

On Wednesday, Bear Stearns said it expects to write down $1.2 billion of assets linked to mortgages in the fourth quarter, soothing investors who had feared multibillion-dollar writeoffs.

However, Bove said this was certainly not a positive development and added that the bank is likely to record a loss in the fourth quarter driven by the expected write down.

Banc of America Securities analyst Michael Hecht cut his fourth quarter estimates on Bear Stearns to a loss of $1.57 a share from a profit of $2.37 a share. He lowered his 2007 earnings view to $6.81 from $10.75 a share.

Given the overall reduction in exposure, Hecht said he viewed negative marks post fourth quarter being less likely for Bear, allowing the firm to start 2008 with a "clean slate".

Hecht maintained his "neutral" rating and $126 price target on the company.

Sanford C. Bernstein on Wednesday cut its price target on Bear to $140 from $150 to reflect its lowered earnings-per-share estimates for the "Big Five" brokerage group, which is comprised of Bear Stearns, Goldman Sachs (GS.N: Cotización), Lehman Brothers LEH.N, Merrill Lynch MER.N and Morgan Stanley (MS.N: Cotización).

Bear Stearns shares have fallen 35 percent this year, compared with a 10 percent decline for the sector as measured by the Amex Securities Broker-Dealer Index . Shares of Bear closed at $103.27 Wednesday on the New York Stock Exchange. (Reporting by Nivedita Gupta in Bangalore; Editing by Bernard Orr)