Morgan Stanley and Goldman Sachs Group Inc. had their third-quarter earnings estimates cut by Deutsche Bank AG, which cited weak trading revenue.
Goldman Sachs’s earnings-per-share estimate was lowered to $1.95 from $3 and Morgan Stanley’s was trimmed to 15 cents from 50 cents, analysts led by Michael Carrier said in a note to clients yesterday. The bank has a “buy” recommendation on both stocks.
Capital markets in the third quarter “were mostly weak across the board following a challenging second quarter, including muted equity trading,” the Deutsche Bank analysts said. “The combination of derisking during the European crises, ongoing regulatory reform uncertainty and negative macro data points led investors to stay out of the markets.”
Deutsche Bank said it’s expecting another weak quarter at New York-based Goldman Sachs because of poor conditions in trading and “soft investment banking.” Morgan Stanley, also based in New York, may post a “weak” quarter because of its trading results and “muted” revenues from investment banking, asset management and wealth management, the analysts said.
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