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Goldman: Financial Winners and Losers

Goldman Sachs shares traded higher despite lowered earnings revisions by Meredith Whitney.


Updated with more info on Goldman Sachs earnings revisions by Meredith Whitney, stock price moves




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Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. Report

was among the winners of the financial sector Tuesday, as the stock held onto its early gains after influential banking analyst Meredith Whitney cut earnings estimates for the company's fourth quarter.

Goldman Sachs

shares remained in positive territory even after the head of Meredith Whitney Advisory Group lowered her fourth-quarter earnings estimate to $5.50 a share from $6, according to several reports, compared with the

Thomson Reuters

consensus target of $5.42 a share.

Whitney also cut her full-year 2010 estimate to $19.20 a share from $19.65, but remains above the consensus target of $18.70 a share. Estimates for Goldman's 2011 and 2012 earnings were also cut to $20.25 and $21.10 a share from $20.60 and $21.45 a share, respectively.

Whitney's revision to Goldman Sachs earnings estimates is her second in as many months. On Dec. 17,

Whitney cut her view of Goldman's profit

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prospects for the current fourth-quarter period, fiscal 2010, and fiscal 2011.

In October,

Whitney downgraded Goldman

, at the time her only buy rating, to neutral days before the bank reported third-quarter earnings results. Since her downgrade, Goldman shares have slid 8.4%.

Whitney's earnings reduction comes after Pali Research analysts cut their fourth-quarter earnings estimate for Goldman to $6.50 a share from $7.74 based on a slowdown in trading activity in the second half of the fourth quarter.

Goldman shares initially pulled back but were lately up $2.34, or 1.4%, to $175.42. Goldman also said Tuesday it will report fourth-quarter results on Jan. 21.



(V) - Get Visa Inc. Class A Report

slipped after RBC Capital Markets analysts downgraded the company's stock to outperform from top pick, citing the 67% surge investors enjoyed in 2009.

Despite the downgrade, RBC Capital Markets said it still maintains a positive view on Visa "and we continue to recommend purchase of the shares." The firm even upgraded its price target to $97 from $89, arguing that the stock deserves a "premium multiple."

Still, Visa shares were down 1.3% to $86.96. Rival


(MA) - Get Mastercard Incorporated Class A Report

were trading lower in sympathy, falling 0.7% to $255.16.

On the other hand,

Capital One Financial

(COF) - Get Capital One Financial Corporation Report

jumped 3.7% after a Stifel Nicolaus analyst upgraded the stock to buy from hold, saying that the worst of loan losses for the company are in the rearview mirror and that Capital One is prepared for regulatory changes in the credit card sector.

The firm also raised its full-year 2010 earnings estimate to $2.86 a share from $2.53 a share, well ahead of the

Thomson Reuters

average estimate of $1.96 a share. Capital One shares were adding 3.7% to $40.48. Rival

Discover Financial

(DFS) - Get Discover Financial Services Report

was higher by 3.1% to $15.06.

Most bank stocks were also trading higher despite a disappointing economic report on existing home sales in November. The National Association of Realtors said pending home sales fell 16%, worse than the economists' average forecast for a 2% decline. It was the first decrease in pending home sales in 10 months, although the index reading of 96 is still 15.5% higher than November 2008.

Ian Shepherdson, chief economist with High Frequency Economics, wrote in an email that the flow of transactions generated by the first-time buyer tax credit slowed sharply in November as the credit expiration was extended, and that may indicate slow activity for some time.

"Still, with property affordable for people in employment we expect sales to be much stronger by mid-year, though we expect December existing home sales to fall sharply," Shepherdson added.

Bank stocks, which typically react negatively to weak housing data, were on the rise.

Bank of America

(BAC) - Get Bank of America Corp Report

gained 2.5% to $16.08,


(C) - Get Citigroup Inc. Report

rose 3.8% to $3.53,

Wells Fargo

(WFC) - Get Wells Fargo & Company Report

was up 3.2% to $28.18, and

JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. Report

climbed 2% to $43.69.

Mortgage insurers were also trading higher despite the pending home sales report.

Triad Guaranty


rallied 4% to 26 cents,

Radian Group

(RDN) - Get Radian Group Inc. Report

was up 5.5% to $8.24,

MGIC Investment

(MTG) - Get MGIC Investment Corporation Report

rose 4.7% to $6.50, and

PMI Group


was higher by 2% to $2.60.


CME Group

(CME) - Get CME Group Inc. Class A Report



(ICE) - Get Intercontinental Exchange, Inc. Report

were trading lower after announcing December trade volume data.

CME Group said that December volume averaged 9.2 million contracts per day, up 13% from a year ago. For the fourth quarter, CME Group said volume averaged 10.2 million contracts per day, down 1% from a year ago but up 1% sequentially.

Separately, ICE said December volume averaged 988,212 contracts, up 17% from a year ago. Fourth quarter average daily volume for all ICE futures contracts increased 13% from a year ago to a record 1.04 million contracts.

Shares of CME Group were down 0.4% to $341.03, and ICE share were sliding 3.8% to $108.62.

-- Written by Robert Holmes in Boston


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