Tuesday, October 13, 2009

Whitney Downgrades Goldman

As earnings season gets under way, noted banking analyst Meredith Whitney cut Goldman Sachs Group to "neutral" from "buy" Tuesday morning in a move that bucks the Street's recent optimism on the shares.

The Goldman downgrade comes ahead of the firm's scheduled quarterly earnings on Thursday, and is consistent with the caution Ms. Whitney has voiced over the airwaves and on Op-Ed pages in recent weeks.

It also follows a six-week surge by the shares that prompted some analysts to say it could go higher still.

Ms. Whitney, who gained renown during the financial crisis for bearish calls on the stocks of large banks that were ultimately proven correct, spoke favorably of Goldman shares as recently as last month.

Goldman stock spent most of August in the low-to-mid $160s. It broke $180 in mid-September, and some analysts then said the shares have room for further growth.

In new coverage last week, Deutsche Bank rated Goldman shares a "buy," the day after Calyon Securities analyst Mike Mayo, also known for his banking downgrades, raised his Goldman price target to $230 from $194.

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