A Goldman Sachs-led (GS) group, including Alpinvest Partners and Canada Pension Plan, is paying about $1.5B for a large portfolio of existing private-equity investments that are being divested as part of the $101B splitting up of ABN Amro (ABNYY) by Banco Santander (STD), Royal Bank of Scotland (RBS) and Fortis, according to the Wall Street Journal.
A Deutsche Bank(DB)'s Analyst, Mike Mayo, downgraded GS on August 12 citing the company's high exposure to equities and capital market pressures, especially if there is weaker European growth. Target to $192 from $209. Mayo cut his price target from $209 to $192. According to Reuters, Deutsche's European economics team believes both regions are or will soon be in recession.
Goldman also has among the highest exposures to equities during a period of more significant equity market declines, including areas of expansion such as China, Mayo said. The result is likely to be weaker-than-expected earnings, the analyst added.
While Oppenheimer's analyst Meredith Whitney cites similar concerns, and cuts her Q3 estimates for the firm. She slashed her Q3 estimates from $3.54 to $2.15 and her FY08 estimate from $15.75 to $14.32.
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