Banc of America initiated coverage on Goldman Sachs (GS ) with buy; initiated coverage on Merrill Lynch (MER ) with strong buy; and initiated coverage on Morgan Stanley Dean Witter (MWD ) with market perform.
Analyst Robert Sobhani says he believes Goldman Sachs is: 1) the leading near-term play on a recovery; 2) a blue-chip long term holding; 3) best-positioned for global growth; and, 4) an eventual S&P 500 candidate. He set a $105 target on Goldman. Sobhani also says he recommends Merrill Lynch as a play on: 1) improving operating leverage relative to peers; 2) improving valuation driven by retail; 3) an old economy rotation story. He set a $70 target on Merrill. While he believes Morgan Stanley is a leading franchise in the high-growth business, Sobhani says he sees limited upside in the near-term relative to peers, with more leverage to a recovery.