In the report, Credit Suisse slashed its third-quarter estimate for Goldman Sachs to 95 cents a share from $2.71 a share, and lowered its 2012-2013 earnings per share estimates to $14 to $16.25 a share from $16.50 to $19 a share. Its target price for Goldman is now $155.
Credit Suisse kept its third-quarter estimate for Morgan Stanley constant at 33 cents a share, although it lowered its 2012-2013 earnings per share estimate to $2.50 to $3 a share, from $2.75 to $3.20 a share. Credit Suisse's revised price target price for Morgan is $29.
Credit Suisse also maintained its 'outperform' rating on Goldman and Morgan and said it sees no strong argument as to why either stock should be trading below current tangible book value—$122 for Goldman and $27 for Morgan Stanley.
"We believe balance sheets are healthy in terms of both quantity and quality of capital, risk assets are contained, liquidity is near record levels, systemic leverage is low and mortgage litigation risk is manageable," Credit Suisse said in the report.
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