Goldman Sachs has made some key downgrades in the financial sector today. The firm has cut both Fannie Mae (NYSE: FNM) and Freddie mac (NYSE: FRE) from an already "neutral" rating, with implied negative, down to the loathed "SELL" rating.
It has also removed it rating on Marshall & Ilsley (NYSE: MI) down to a Neutral from a Buy rating.
Goldman Sachs has also lowered estimates on Bear Stearns (NYSE: BSC), J.P.Morgan Chase (NYSE: JPM), Lehman Brothers (NYSE: LEH), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), and Washington Mutual (NYSE: WM). Others were hit as well, but these are the major calls.
The firm wants investors to stay defensive regardless of bailout pacts. It believes that Freddie mac is a short ahead of earnings this week and believes you can own a Put Spread in Wa-Mu.
Jon C. Ogg
February 25, 2008