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Story updated to include the proper stock symbol for Lazard.

NEW YORK (

TheStreet

) --

Bank of America

(BAC) - Get Free Report

analyst Guy Moszkowski downgraded

Citigroup

(C) - Get Free Report

and

Goldman Sachs

(GS) - Get Free Report

to "neutral" from a buy recommendation due to expected weakness in first quarter results.

"Results

are unlikely to be dismal, and should show improvement over Q4, but we don't expect seasonal improvement as strong

and as often seen in the past," Moszkowski said in the note. "Client engagement remains subdued, Mid-East turmoil likely only to further reduce customer risk appetite."

Moszkowski added that as investors turn away from BofA, they will focus on financials that are less "or even positively" affected by the adoption of the Volcker Rule, including non-banks such

The Blackstone Group

(BX) - Get Free Report

,

KKR

(KKR) - Get Free Report

and

Lazard

(LAZ) - Get Free Report

.

The Volcker Rule, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law back in July, generally restricts banks from engaging in proprietary trading or owning private equity or hedge funds.

"This, together with low valuation relative to current earnings, drives keeping

JPMorgan Chase

(GS) - Get Free Report

a 'Buy'" the note added.

Citigroup's stock was down 9 cents at $4.57 in morning trading while Goldman Sachs stock was down $2.93 to $161.56.

--Written by Maria Woehr in New York.

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Maria Woehr

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