Large Cap Bank Stocks Capitulate
Merrill Lynch Analyst Edward Najarian said he does not expect credit metrics to recover until 2010 and forecast more dividend cuts and capital raising at banks.
Najarian also slashed his earnings estimates for regional large cap banks by an average of 22% for 2008 and 19% for 2009.
He said the estimate cuts were largely due to higher loan losses at banks, as well as an increase in loan loss reserve building.
Najarian said Bank of America and Wachovia may miss Q2 Wall Street estimates by the greatest percentage and
that U.S. large-cap regional banks' stocks now appear to be in "capitulation mode" and will trade lower in the near term.
Najarian also slashed his earnings estimates for regional large cap banks by an average of 22% for 2008 and 19% for 2009.
He said the estimate cuts were largely due to higher loan losses at banks, as well as an increase in loan loss reserve building.
Najarian said Bank of America and Wachovia may miss Q2 Wall Street estimates by the greatest percentage and
that U.S. large-cap regional banks' stocks now appear to be in "capitulation mode" and will trade lower in the near term.
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