Meredith Whitney Cuts UBS AG, Merrill Lynch and Citigroup's Estimates

Just how low can Meredith Whitney go? The Oppenheimer & Co analyst has cut estimates — again — on UBS AG (UBS), Merrill Lynch & Co. (MER) and Citigroup Inc. (C) in a trio of notes out Wednesday.

Merrill, rated “underperform,” faces “headwinds of deleveraging and the next disruptive step of restructuring.” Ms. Whitney cut her estimate for the broker’s second quarter earnings per share from a gain of $0.20 to a loss of $4.21, including an estimated total writedown of $5.8-billion.

Ms. Whitney says she continues to “be negative in our outlook on Citigroup due simply to the fact that the company has seriously constrained earnings power, in addition to the writedowns seen in 2Q08,” which she estimates will hit $12.2-billion. Oppenheimer cut its forecast for Citigroup’s second quarter per share earnings from a loss of $1.25  from a gain of $0.21.

UBS is rated “underperform” by Oppenheimer because the Swiss bank “faces a difficult task of navigating through its risk exposures from the investment bank and rebuilding its damaged wealth management franchise.” Ms. Whitney lowered her estimate for UBS’ earnings per share in the second quarter from a gain of $0.69 to a loss of $2.03.

Comments

[catoelder]

More of the same from Whitney,and easy to do too,given that the established trend for banks has been down for the last 4 quarters!What about early 2007 when she was saying what a great company Bear Stearns was?2008 is a poor year for banks,so no one expects much.The second half of 2008 will be slightly better than the first half,but it will be 2009 before the banks start to get the benefits of their cost cuts;repriced loans;asset sales and so on.