Guesstimate Sachs

14 February 2008 By Antony Currie Follow @AntonyMCurrie

Valuing stumbling assets like mortgages and LBO loans is now de rigeur and analysts are rightly, if belatedly, slashing Q1 estimates for Goldman and its peers. But it s more art than science. And how lucrative brokerages large, opaque trading businesses are is anyone s guess.

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Lehman Brothers analyst Roger Freeman has cut estimates on the major US investment banks, largely based on expected writedowns on a mix of commercial real estate, leveraged loans, private equity investments residential mortgages

Freeman trimmed estimates for Bear Stearns' first quarter to 90 cents a share; cut Morgan Stanley's by just over a third to 97 cents a share; halved Goldman Sachs' to $2.10 a share; and slashed Merrill Lynch's by 79%.

Credit Suisse analyst Susan Roth Katzke cut her Goldman frstquarter estimate to $2.70 a share from $4.59, while Deutsche Bank's Mike Mayo cut estimates to $2.63 a share from $4.64.

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