Shares of Goldman Sachs had a brief hiccup on Tuesday before heading 1.7 higher for the day. The midday selling was sparked by well known Wall Street banking analyst Meredith Whitney, who lowered her fourth quarter earnings estimates for the firm for a second time in recent weeks.
Whitney reduced her earnings estimate on Goldman Sachs from $6 a share to $5.50 a share, according to a Dow Jones report. After the news hit the wires, Goldman shares gave back nearly all of their gains before rallying late to close 1.7 percent higher at $176.14 a share.
Whitney, the CEO of Meredith Whitney Advisory Group, had already cut Goldman estimates once, back on December 17. In Tuesday’s report, she also reduced the 2010 annual earnings outlook on Goldman Sachs to $19.20 a share from her earlier estimate of $19.65.
Though Goldman Sachs estimates have been cut by Whitney and her firm, they are still higher than the average analyst estimate. According to Thomson Reuters, the consensus estimate for fourth quarter profit from Goldman Sachs is $5.43 a share, about 7 cents below Whitney’s new target.
Goldman Sachs has topped average earnings estimates in the first three quarters of 2010. However, each consecutive quarter saw the margin above expectations dwindle.
The bank announced that it will release fourth quarter earnings results before the opening bell on January, 21.
