It’s tough love.
Meredith Whitney - the heavyweight OpCo analyst who first made a call on Citi’s capitalisation troubles back before $10bn writedowns became ten-a-penny affairs - is downgrading Goldman.
To “perform” from “outperform” mind you - so nothing dreadful:
For over two years, GS has been our top pick in financials and we have correctly been well ahead of the Street with our estimates; however, we no longer have the surety of boldness in our earnings outlook for at least the first half of the year.
The bank will suffer from its own success in 2008. We can think of worse things.
Whitney cut the 2008 earnings view to $20.90 a share from $25.50. But perhaps more stinging is the fact that Whitney expects shares in Goldman to become part of the hoi polloi:
[Valuations] simply will not be sustainable in a year when Goldman Sachs will probably deliver results that will not be substantially better than its peers.
