Banks
Merrill May Write Down $5.4B (Update)
06/27/08 - 01:24 PM EDT
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Updated from 10:39 a.m. EDT A Lehman Brothers analyst lowered his estimates for Merrill Lynch MER, predicting downgrades to monoline bond insurers MBIAMBI and AmbacABK will cause some $5.4 billion in new writedowns. Lehman Brothers analyst Roger Freeman, who had been calling for a loss of 53 cents per share, is now estimating losses will be $2.99 a share. Citing a "deeper review of Merrill's monoline exposures," he increased his writedown estimate from $3 billion and lowered his price target to $44 from $47. Merrill shares were down 1.8% to $32.57 in recent trading Friday. CNBC, citing sources close to the firm, reported Friday afternoon that Merrill is in preliminary discussions about selling its passive minority stake in Bloomberg. Lehman joins Goldman Sachs and Sanford Bernstein in ratcheting up its pessimism. Analysts at those firms lowered their estimates for Merrill on Thursday. Merrill is set to report results July 17, making it the last of the big four U.S. brokers to do so. Lehman BrothersLEH posted a loss of close to $3 billion in its most recent quarter, while Goldman SachsGS easily exceeded analysts' forecasts. Morgan StanleyMS earned a profit from selling assets, even though it saw a slowdown in its major businesses. For additional views on the market and investing, check out what the 45+ Wall Street pros of RealMoney have to say. From master investor Jim Cramer to top chartist Helene Meisler, contrarian Doug Kass to markets commentator Vince Farrell, you'll get the 360-degree perspective you need to survive and potentially profit in these tough times. Click here for a limited-time special offer.
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