UPDATE 2-Bernstein sees loss at Goldman, cuts M. Stanley view

lunes 17 de noviembre de 2008 15:40 CET

(Recasts; adds more analyst comments, background, Citi price target cut)

Nov 17 (Reuters) - Bernstein Research analyst Brad Hintz became the latest to join the ranks of analysts expecting a fourth-quarter loss at Goldman Sachs (GS.N: Cotización), as he expects the company to be hurt by writedowns amid weak credit market conditions.

Hintz, who also slashed his earnings estimates on Morgan Stanley (MS.N: Cotización), expects the former investment banks to suffer as global economic conditions continue to deteriorate.

Separately, theflyonthewall.com reported that Citigroup cut its price target on Goldman shares to $125 from $150.

Shares of Goldman fell 5 percent before the bell, while those of Morgan Stanley slid 3 percent.

Bernstein's Hintz expects Goldman Sachs to post a fourth-quarter loss of 54 cents a share, hurt by writedowns related to its investments in Industrial and Commercial Bank of China Ltd (601398.SS: Cotización) (1398.HK: Cotización) (ICBC) and its private equity holdings.

Goldman is likely to lose $800 million from its investment at ICBC, due to the company's declining equity value on the Hong Kong Stock Exchange, Hintz said.

Goldman may also face reduced fixed income sales and trading revenues due to the difficult credit market conditions, Hintz, who had earlier expected a fourth-quarter profit of $2.12 a share at the company, said in a note to clients.

Over the past two weeks, a slew of analysts at brokerages including Fox-Pitt Kelton and UBS have forecast that Goldman will post a fourth-quarter loss, which would be its first ever as a public company. The analysts' expectations for a loss range between $2.50 per share and 40 cents a share.   Continuación...