JPMorgan Cazenove analysts cut their earnings outlook for investment banks for 2011, 2012 and 2013, citing worsening conditions in fixed income and equities.
UBS AG had its 2011 earnings-per-share estimate trimmed by 4 percent and the 2012 estimate by 11 percent, JPMorgan analysts including Kian Abouhossein said in a note to clients today. JPMorgan also curbed its Goldman Sachs Group Inc. forecast for 2011 by 37 percent and the 2012 figure by 19 percent.
The earnings downgrades of banks including Goldman and UBS “reflect weaker investment banking client activity and lower volumes across the board than previously anticipated,” JPMorgan’s analysts said. “Consensus needs to come down to reflect the weaker-than-expected environment” in 2011’s fourth quarter, they said.
JPMorgan also cut forecasts for other banks including Morgan Stanley, whose estimates were reduced by 5 percent for 2011 and 17 percent for 2012.