This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Investment Bank Strength Won't Last: Analyst

NEW YORK ( TheStreet) -- U.S. securities giants Goldman Sachs (GS - Get Report), JPMorgan Chase (JPM - Get Report), Morgan Stanley (MS - Get Report), Bank of America (BAC)and Citigroup (C - Get Report)are expected to have a strong first quarter, but that strength is likely to prove short lived, according to a research report Friday from Atlantic Equities analyst Richard Staite.

"We do not see this as a major turnaround," for bank fixed income currencies and commodities (FICC) divisions, Staite writes. That is because first quarter numbers almost always look good when compared to the fourth quarter, and this year's first quarter is likely to be weaker than last year.

Staite is particularly bearish on Morgan Stanley, which he believes "will remain at a competitive disadvantage given a lack of scale in FICC and higher funding costs."

Staite has an "underweight" rating on Morgan Stanley and an $18 price target compared to Thursday's closing price of $19.74.

The analyst believes first quarter FICC strength is "more likely to be focused on those with scale," such as Goldman and JPMorgan, with Goldman being the single biggest beneficiary. Accordingly, Staite upped his first quarter earnings estimate on Goldman to $3.61 from $2.62.

Staite also tweaked his price target on Bank of America, raising it slightly to $8 from $7.5 per share. He made no changes to his overall ratings, however, leaving Bank of America and Goldman at "neutral" and Citi and JPMorgan at "overweight."

-- Written by Dan Freed in New York.

Follow me on Twitter
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
C $51.16 0.00%
GS $180.70 0.00%
JPM $62.02 0.00%
MS $32.29 0.00%
AAPL $110.78 0.00%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs