Merrill Lynch "overweight," estimates reduced

04/04/06 - Prudential Financial

NEW YORK, April 4 (newratings.com) - Analyst Michael L Mayo of Prudencial Financial reiterates his "overweight" rating on Merrill Lynch (MER), while reducing his estimates for the company. The target price is set to $89.

In a research note published this morning, the analyst mentions that the company has to incur a one-time, after-tax, non-cash charge of $1.2 billion in 1Q06 for stock awards-related issues. Merrill Lynch would incur the charge due to the adoption of SFAS No 123R, the estimated grants to career retirement eligible employees in 2007 and changes in the existing stock awards, the analyst adds. The EPS estimate for 2006 has been reduced from $6.25 to $5.00.