It’s unfair. It’s so, so unfair. But we’re going to do it anyway.
Spare a thought for the analysts who on Tuesday upgraded their recommendation on BNP Paribas to ‘Buy’ from ‘Add.’
How were they to know? The analysts from this German bank, also yesterday rumoured to have bad news on the way relating to subprime, had “reviewed [their] BNP Paribas model in detail,” and increased their EPS forecasts.
For example, in wealthy and asset management they upped their estimates by 9.2 per cent this year, and 4.2 per cent next.
And given the French bank’s confident performance at their Q2 results, what was there to lose? “According to BNP Paribas, the exposure to the US subprime market and the LBO financing market is limited. As a result, we are confident that BNP Paribas’ earnings should not be affected by large write-offs due to the subprime crisis.”
Still, they may be right. Felix Salmon wondered at the fuss over some long-only funds with some very illiquid paper. BNP shares were down more than 5 per cent at that point, then closed off 3.4 per cent – “despite the fact that it’s other investors’ money we’re talking about, here, not BNP Paribas’s own,” said Salmon.
BNP was on Friday down a further 4.4 per cent, taking them back well below where they were sat before this lot slapped a ‘buy’ on them. A bargain? Remember, timing is everything.