Goldman Analysts Cut Euro Banks to Underweight on Lofty Prices

Analysts at Goldman Sachs Group Inc. have cut their recommendation on euro-denominated high-grade bonds by banks to underweight, less than three months after ending their overweight on the sector.

Bank bonds are now trading at even tighter spreads than the rest of the market, which “leaves limited value in keeping a neutral allocation on the sector,” analysts led by Lotfi Karoui wrote in a note to clients. Banks’ spread premium “is decidedly a thing of the past.”