Lehman trading hurt by counterparty worry: analyst
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Thu, 05 Jun 2008 12:17:01 GMT |
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NEW YORK (Reuters) - Lehman Brothers Holdings Inc has sufficient capital and funding to survive, but has seen derivatives trading results hurt by clients worried about the credit strength of certain units, analyst Brad Hintz told clients Thursday."While Lehman's principal operating subsidiaries -- their U.S., UK and Japanese broker-dealers, Bankhaus in Germany and their U.S. banks -- are still being fully accepted by the market, cautious credit officers at clients of the firm are limiting trading with the unregulated derivatives subsidiaries of the company," said Hintz, who follows brokers for Sanford Bernstein.As a result, Hintz reduced his third- and fourth-quarter estimates by 11 cents per share each, anticipating reduced earnings from the trading of debt, equities and commodities derivatives.Hintz also reduced his 2009 and 2010 EPS estimates by 15 cents each, to $5.95 a share and $6.70 a share, respectively."We recommend investors remain on the sidelines with Lehman until the firm demonstrates a reduction in leverage and lowers its exposures to troubled asset classes," he said.(Reporting by Joseph A. Giannone, editing by Gerald E. McCormick)
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