Wall Street bets on Lehman rebound

June 5, 2008

Lehman shares closed Tuesday near their lowest in five years. Since the year began, Lehman investors have lost more than $17.7 billion.


Lehman shares have dropped to just above $30, and Wall Street analysts have scaled back their expectations for the stock. Nevertheless, the average analysts’ target price assumes the stock will rebound as much as 85 percent, according to Reuters Estimates.


Wall Street remains decidedly bullish on Lehman shares, despite its drop to near a five-year low and reports it needs to raise capital.


Credit default swaps, which rise as investors lose confidence in companies’ financial condition, have climbed sharply of late, spurred in part by concern Lehman Brothers and other investment banks may need to raise additional capital, according to CDS dealers.



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This massive loss of confidence and sharp drop in prices will suit the enterprising value investors nicely.

I have no doubt the stock will rise to $65 again. Question is whether it has bottomed out?


Posted by jeflin | Report as abusive

The bottom has come for LB. The couldn’t withstand the storm like so many other financial institutions, and was plowed under in a hail of junk rated glory. Not to worry, uncle sam will step in funded by the american public to bail out these shoddy financial companies.

Posted by Financial | Report as abusive