Citi ups Lehman from ‘hold’ to ‘buy’
The upgrade comes after speculation that firm might be the next to fall after the collapse of Bear Stearns.
Citigroup, Inc. has upgraded Lehman Brothers Holdings Inc. “hold” to “buy,” according to published reports.
This comes after speculation on the Street that the New York-based firm might be the next to fall after the collapse of The Bear Stearns Cos. Inc. due to heavy exposure to subprime mortgages (InvestmentNews March 17).
The upgrade is due in large part to Lehman Brothers having solid liquidity and the ability to access $200 billion from the Federal Reserve’s new primary dealer credit facility, Citigroup analyst Prashant Bhatia wrote in a note to investors.
After the initial worries on Lehman Brothers, which caused the nation’s fourth-largest securities firm to lose over a third of their value in early March 17 trading, the firm has since rebounded, helped by beating analysts expectations in its first quarter-earnings released the next day (InvestmentNews March 18).
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