One of the nasty little UXBs Eliot Spitzer left buried on Wall St before he opted for a more private life was a little annotated chart which, following the post-dot-comedy reforms covering analysts’ research, now appears close to the bottom of each and every piece of published stock research.
While relegated to somewhere amongst the fine print, this provides a snap-shot of an individual analyst’s investment recommendations on the stock he or she is writing about. Ouch.
Here’s the chart for one William F Tanora, Goldman Sachs’ esteemed bank-watcher, showing his record on Lehman Brothers.
That’s right : Buy, Buy, Buy…all the way down.
Tanora, on Thursday, signalled that he had finally had enough – Lehman was downgraded from “buy” to “neutral” by Goldman and the stock has been removed from one of the firm’s key portfolio recommendation lists.
Since we added Lehman to the Americas Buy List on 3/18, the stock has fallen 84% vs S&P down 7.4% and a 3% decline for our coverage universe. Over the past 12-m LEH is down 87% versus a 15% decline in the S&P 500.
Not that many of Tanora’s rivals will be snickering, of course. A price target of $20 or so was par for the Street – until the weekend.
What is happening now is that the analytical community has thrown up their collective hands – a significant factor, we think, behind the fresh dive in Lehman stock today (down 40 per cent at $4.37 in early trade). In Tanora’s words:
At this juncture, there is too much uncertainty around Lehman’s future strategic initiatives to recommend the shares.