When Banks & Brokers Upgrade & Downgrade Each Other (GS, MS, JPM)

Banking, finance, and taxes

Published: June 26, 2012 9:15 am

Last Updated: April 28, 2020 10:01 am

In a rare move, Goldman Sachs Group (NYSE: GS) has made some changes to its Conviction Buy List on competing banks. The reason this is so rare is because when analysts of banks and brokerage forms make upgrades and downgrades on their competitors many investors take that to mean that they are upgrading or downgrading their own companies.

Goldman Sachs removed Morgan Stanley (NYSE: MS) from its prized Conviction Buy List. It also cut the rating down to Neutral rather than maintaining a Buy rating and just removing it from the Conviction Buy List.

The replacement is J.P. Morgan Chase & Co. (NYSE: JPM) on the Conviction Buy List. Despite the massive trading loss of late, Goldman believes that the bank has the capital structure that will easily absorb the current woes at hand. Perhaps they call it a Fortress Balance Sheet for a reason.

Today’s call would be mixed as far as how the brokerage community would evaluate it. It may say more about Morgan Stanley (NYSE: MS) as that investment banking and brokerage outfit is closer to Goldman Sachs than J.P. Morgan Chase.

JON C. OGG

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