Jefferies cuts price targets on Goldman Sachs and Morgan Stanley
Jefferies lowers its target for Goldman Sachs to $1,124 from $1,299 and for Morgan Stanley to $223 from $261
Published
Neither cut comes with a specific earnings or balance-sheet trigger attached. But the size of the reductions, more than $175 for Goldman Sachs and nearly $40 for Morgan Stanley, marks a notable reset in sell-side expectations for the two firms.
The cuts land on the two banks most exposed to the capital markets and AI financing themes that Goldman Sachs and Morgan Stanley have themselves been promoting in recent weeks. Morgan Stanley's Dan Simkowitz described AI financing as being in its "early to middle innings," and Goldman Sachs has been pushing further into asset management through talks with Palmer Square.
The reductions also arrive as the New York Fed examines bank exposure to private credit. The regulator has been looking since spring at private credit loan exposure at Morgan Stanley and three other banks, asking about exposure, risk management and collateral quality. That scrutiny adds a supervisory overhang just as Jefferies lowers its valuation bar for both franchises.