Washington Mutual "neutral," target price reduced

04/05/07 - Credit Suisse

NEW YORK, April 5 (newratings.com) - Analyst M Orenbuch of Credit Suisse maintains his "neutral" rating on Washington Mutual Inc (WM), while reducing his estimates for the company. The target price has been reduced from $47 to $42.

In a research note published this morning, the analyst mentions that the company’s performance going ahead is likely to be significantly affected by the weakness in the sub-prime market. The EPS estimates have been reduced to reflect the credit deterioration in the company's high-risk sub-prime, option ARM, and home equity portfolios, the analyst adds. The EPS estimates for 2007 and 2008 have been reduced from $3.70 to $3.00 and from $4.30 to $3.75, respectively.