4 de abril de 2008 / 9:02 / hace 9 años

UPDATE 2-RESEARCH ALERT-BofA cuts Q1 earnings view for brokers

 (Adds details)
 April 4 (Reuters) - Merrill Lynch & Co Inc MER.N will likely post a loss in the first quarter, said a Banc of America Securities analyst, who also cut his earnings forecast on several U.S. brokers on expectations of higher mark-downs on fixed income inventories.
 The December fiscal year-ended firms are also likely to see weaker debt underwriting across most credit areas, similar to what was reported by the November fiscal year-ended firms like Lehman Brothers Holdings Inc LEH.N, Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), analyst Michael Hecht wrote in a research note to clients, previewing first-quarter results.
 “While many of the firms with a November FYE saw a relatively robust set of results excluding markdowns in various sales and trading areas, an issue the December FYE firms will have to contend with is that market conditions in March were less favorable than December across equities and fixed income markets,” Hecht said.
 The analyst cut his price target and earnings estimates for the first quarter and 2008 on Jefferies Group Inc JEF.N, Lazard Ltd (LAZ.N), Evercore Partners Inc (EVR.N) and Greenhill & Co Inc (GHL.N).
 For Merrill, he expects first-quarter gross writedowns of $7.5 billion, up from his prior view of $3.5 billion. Net writedowns for Merrill is expected to be $5.8 billion, he said.
 FIRST-QUARTER PREVIEW
 Most areas of investment banking continued to slow, Hecht said.
 In the first quarter, merger and acquisition fees globally fell 47 percent quarter-on-quarter and 30 percent year-on-year, the analyst said.
 Equity underwriting fees were down 55 percent quarter-on-quarter and 32 percent year-on-year, and debt underwriting fees were down 11 percent quarter-on-quarter and 52 percent year-on-year, Hecht noted.
 He, however, expects results in cash equities to be strong but down sequentially and on a year-on-year basis. Hecht also expects to see growth in areas like equity derivatives, prime brokerage, interest rate derivatives and forex.
 In his 12-month thesis on the sector, Hecht said he was “neutral” on the large investment banks, but preferred asset managers, given positive operating leverage to above-average organic growth and higher trending equity markets.
 The following table lists the price target and estimate changes on certain brokers by the brokerage:  COMPANY                 PRICE TARGET   CLOSE PRICE   Q1 EPS VIEW  2008 EPS VIEW
                         New  Old      April 3      New   Old    New    Old  Merrill Lynch MER.N      $56  $65      $45.89      -$2.25 $0.01  $1.00  $4.10  Lazard Ltd (LAZ.N)         $59  $63      $38.11       $0.50 $0.77  $3.25  $3.45  Jefferies JEF.N          $22  $26      $17.12       $0.12 $0.29  $0.84  $1.46  Greenhill (GHL.N)          $80  $85      $72          $0.75 $1.13  $4.14  $4.46  Evercore Partners (EVR.N)  $22  $25      $19.01       $0.20 $0.37  $1.15  $1.41   (Reporting by Tenzin Pema in Bangalore; Editing by Bernard Orr)   

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