Notes on GS downgrades and AAPL. 
Courtesy of Notable Calls.
Goldman Sachs (NYSE:GS): Ladenburg lowers to tgt $80 from $140
GS (SELL $80) NEW PRICE TARGET $80,, WAS $140. The problem in the short run is valuation. The company has as a policy the purchase of distressed assets. In the past this has proven to be a very successful strategy generating an estimated $10 billion in revenues. Today this strategy is falling under the new mark to market accounting rules. These rules are forcing write downs of the acquired assets and this may harm earnings. Additionally, the value of the Industrial and Commercial Bank of China holding may have been lowered by as much as 30%.
Notablecalls: Ladenburg’s Dick Bove is among the Axes. Looks like GS is headed lower.
Goldman Sachs (NYSE:GS): Merrill Lynch calling for negative Q4 EPS
Merrill Lynch is out with a big slash on Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS):
GS 4QE (Nov) to -$0.49 from $2.98 and MS 4QE to $0.36 from $0.72. Key driver is terrible recent global equity market performance. Effect magnified at GS by significant exposure via prop, Pvt. Equity businesses, though equity rebound by 11/30 could change picture. Also, MS may have more comp. leverage given better 2H result, larger YTD accrual.
Trading volume surges on de-lev’g, but marks outweigh
Fixed Inc. trade volumes up sharply as de-leveraging triggered trading activity across Treasuries (+20%), MBS (+29%) Inv. Grade (+10%). But spreads gapped significantly from previous highs as credit markets seized in Sep: High Yield spreads +723bps and Inv. Grade spreads, +193bps QTD. Equity mkts have fallen sharply (S&P 500: -25%, NASDAQ: -27%), on very strong volumes (NYSE: +43%, NASDAQ: +22%).
Inv. Banking hurts as M&A weak; Debt U/W abysmal
M&A closings down 25% sequentially to $472bn, Anncts. also down following marquee deals last quarter (-18%). Annc’d/Completed ratio for 4Q is running 1.4x, indicating pick-up in backlogs. M&A fee backlog now $7.3bn, up 2.3% from 3Q end, but down 7.6% from last month, and off 21% from Oct-07. Equity U/W running down 43% QTD (-55% YoY), with Int’l driving weakness (-74% seq.). US up 52% on weak 3Q, though lucrative IPO business fell to zero QTD. Debt U/W extremely weak.
Goldman Sachs (NYSE:GS) price tgt is cut to $100 from $159. Morgan Stanley (NYSE:MS) tgt remains at $25.
Notablecalls: Phew, this is a BIG cut. One has to embrace the fact MER is calling for negative EPS in Q4 for GS. Yes, n e g a t i v e!
I see GS going below $90 level today.
Apple (NASDAQ:AAPL): iPhone production forecast is now under pressure- FBR
Friedman Billings Ramsey (FBR) is out with a very negative call on Apple’s (NASDAQ:AAPL) iPhone demand:
Our most recent checks suggest to us Apple’s iPhone production forecast is now under pressure. While our previous checks indicated that iPhone production would fall about 10% sequentially in calendar 4Q, our new checks indicate that iPhone production could fall more than 40% sequentially in 4Q. We believe asimilar amount of production was removed from the calendar 1Q build forecast, though there is still plenty of time to modify that forecast should further revisions be necessary ( – firm sees this neg for BRCM, MRVL, LLTC).
Notablecalls: Note that at the beginning of Oct Apple said iPhone builds remained healthy. Looks like iPhone demand has deteriorated over the past weeks. This is going to hurt AAPL.
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