Punk Ziegel lowered its earnings estimates for the first quarter and full year on several financial institutions in the US including Goldman Sachs, Merrill Lynch and Citigroup, to reflect higher loan losses underpinned by the weaker economy.
"Economic reports and management statements suggest that the economic environment has weakened in the past month. Therefore, the loan loss provisions for each of the companies has been dramatically increased to reflect the changing economic environment," analyst Richard Bove said in a note to clients.
Bank stocks declined sharply in 2007 and are being held in place by their dividends and the value of their franchises, Bove added.
Shares at Merrill were off 0.7 percent in premarket trading, while Citi fell 1 percent. Goldman shares were unchanged but are down nearly 30 percent off their 52-week high.