* Citigroup cuts price target to $45 from $52
* Goldman Sachs cuts price target to $48
* Nomura cuts price target to $50 from $55
May 11 (Reuters) - Several brokerages, including Citigroup and Goldman Sachs, cut their share price and earnings targets on JPMorgan Chase & Co, a day after the lender disclosed that it suffered a $2 billion trading loss from a failed hedging strategy.
The company’s shares fell 7 percent to $37.77 in pre-market trade.
Analysts at Citigroup said they expected the trading loss to hurt JP Morgan’s reputation and cut their price target to $45 from $52.
“To have a loss this size when credit spreads actually widened in the quarter begs the question of what the point of this trade was, and reinforces questions about how much of the activity in the CIO office is hedging,” the analysts said in a note to clients.
Goldman Sachs, which cut its price target to $48, said while the direct impact of the loss was manageable, the broader implications are negative, as it highlights the challenging operating environment and raises questions around regulatory scrutiny.
Nomura cut its price target on the stock to $50 from $55.
“What really hurts is the negative impact on JPM’s reputational premium that is likely to hit the stock,” Nomura said.