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Feb 15 (Reuters) - Fox-Pitt Kelton slashed its first-quarter earnings estimates on four top investment banks to reflect continued challenges in the credit markets, leveraged lending and corporate debt in particular.
The brokerage cut its earnings view on Goldman Sachs Group Inc (GS.N), Morgan Stanley Inc (MS.N), Bear Stearns Cos BSC.N and Lehman Brothers Holdings Inc LEH.N saying corporate debt exposure is a key area of concern as economic weakness proliferates and it is difficult to hedge.
“We have little hope that the current challenges facing global capital markets, highlighted by broad illiquidity, will turn around any time soon,” analyst David Trone said in a note to clients.
The brokerage cut its earnings estimates on Goldman Sachs to $2.58 a share from $5.30 a share for the first quarter, and Morgan Stanley’s estimates to $1.22 a share from $1.49 a share.
Fox-Pitt also lowered its first-quarter earnings view on Bear Stearns to $1.60 a share from $2.20 a share and cut Lehman Brothers’ estimates to $1.34 a share from $1.85 a share. (Reporting by Neetha Mahadevan in Bangalore; Editing by Gopakumar Warrier)