By Sam Boughedda
An analyst from Odeon Capital has downgraded the shares of Citigroup (NYSE:) to hold back, Goldman Sachs (NYSE:) to sell hold, and Morgan Stanley (NYSE:) to sell pending in a note to investors on Tuesday.
In the note, the analyst says that “the investment banking industry is under severe pressure” and that companies are “faced with tough decisions.”
“These companies face serious challenges as business dries up. Additionally, actions taken by the Federal Reserve to reduce its balance sheet suggest that the current difficult times will continue through 2023,” the analyst wrote.
He added that recent news reports that Goldman Sachs and its industry peers are recalling employees to corporate headquarters are because business in the industry is under terrible stress.
The analyst said that for businesses, it’s “time to reach out to customers and do business.”
“Using data from Bloomberg, we constructed three charts comparing July and August this year with the same months a year ago,” said the analyst, who said what he reveals, is that “the company is really in trouble”.
“Apart from investment-grade bonds, all major categories are down. Additionally, companies with the highest profit margins are down the most,” he concluded.