Analysts at Goldman Sachs (GS – Get Report) cut their earnings per share estimates for large cap banks, as they see a handful of interest rate cuts from the Federal Reserve in the next few years.
The SPDR S&P bank ETF (KBE – Get Report) was falling 0.04% Tuesday morning.
“The rate outlook has continued to deteriorate, with our estimates conservatively marked to a forward curve implying 5 further Fed Funds cuts through 2021,” wrote Goldman Sachs analyst Richard Ramsden in a note out Monday evening. “We reduce our 2020 earnings estimates by ~2% from lower NII [net interest income].” Net interest income is the amount in interest revenue a bank takes in minus the amount in interest it pays to its lenders.
