UPDATE 1-Bernstein cuts Lehman, Goldman, M.Stanley earnings view

martes 27 de mayo de 2008 14:59 CEST

 (Adds analyst's comments, share movement)
 May 27 (Reuters) - Sanford C. Bernstein slashed its
earnings outlook for Lehman Brothers Holdings Inc LEH.N,
Goldman Sachs Group Inc (GS.N: Cotización) and Morgan Stanley (MS.N: Cotización) to
reflect weaker fixed income sales and trading results, and a
tough investment banking environment.
 Market conditions have remained challenging through the
quarter, especially in the fixed income markets, Bernstein
analyst Brad Hintz said.
 All the major brokerage firms still have significant
exposure to asset classes that have either taken charges since
the start of the credit crisis or remain under pressure in the
credit markets, he said.
 "As long as these firms have these troubled assets on their
balance sheets, their earnings results will be affected by the
fluctuations in the fixed income market and the basis and roll
risk of their hedging strategies," Hintz said in a note to
 He continues to favor firms with "the most diverse business
mixes" as they will be less impacted by the weakening revenue
trends of the industry. "Our analysis shows that this is Morgan
Stanley," he said. Hintz has an "outperform" rating on Morgan
  Lehman shares fell 3.8 percent in pre-market trade after
closing $36.11 Friday. Goldman Sachs closed at $172.64 and
Morgan Stanley closed at $41.83 Friday on the New York Stock
  The following table lists Bernstein's estimate changes on
the three banks: COMPANY                        Q2 EPS VIEW    
                          CURRENT PRIOR    CURRENT  PRIOR
Lehman Brothers LEH.N      $0.15   $1.38    $3.42    $4.64  
Market perform Goldman Sachs (GS.N: Cotización)         $3.25   $3.70   
$14.01   $14.46  Market perform Morgan Stanley (MS.N: Cotización)       
$1.05   $1.38    $5.20    $5.54   Outperform
 (Reporting by Neha Singh in Bangalore; Editing by Himani