The brokerage also cut its price target on several asset managers including Calamos Asset Management Inc <CLMS.O> and T. Rowe Price Group <TROW.O>.
(Reuters) - Citigroup forecast $9 billion of writedowns at U.S. investment banks in the first quarter of 2008, primarily driven by additional leveraged loan and mortgage-related losses.
The brokerage also cut its price target on several asset managers including Calamos Asset Management Inc <CLMS.O> and T. Rowe Price Group <TROW.O>.
Calamos Asset's performance had deteriorated in early 2008 and Citigroup said it does not see a rapid turnaround in outflows during the year.
The brokerage said though T. Rowe was one of the best-positioned asset managers to drive meaningful earnings growth, the stock had priced in the prospects and investors should wait for a better entry point to become more aggressive on the shares.
!ADVERTISEMENT!Lehman Brothers Holdings Inc <LEH.N> was most exposed to residential mortgage deterioration during the last week of the quarter, analyst Prashant Bhatia wrote in a note to clients on Friday. He forecast writedowns of $1.6 billion at Lehman.
Bhatia also forecast writedowns of $3.2 billion at Goldman Sachs Group Inc <GS.N>, $2.9 billion at Merrill Lynch & Co Inc <MER.N> and $1.2 billion at Morgan Stanley <MS.N>.
Following are the price target changes made by Citigroup:
Stock Price Target Rating
New Old
T. Rowe Price $54 $60 Hold
Calamos $20 $24 Hold
Lazard <LAZ.N> $40 $50 Hold
Och-Ziff Capital <OZM.N> $25 $29 Hold
Franklin Resources <BEN.N> $102 $112 Hold
Fortress Investment <FIG.N> $14 $19 Hold
Legg Mason <LM.N> $85 $95 Buy
Blackstone Group <BX.N> $30 $33 Buy
(Reporting by Amulya Nagaraj and Aditi Samajpati in Bangalore; Editing by Amitha Rajan, Bernard Orr)
