This morning Credit Suisse cut Countrywide’s price target from $40 to $28 a share, and expects the company to report a loss of 58 cents per share in 2007, down from a previous $3 a share.
Credit Suisse also reduced its 2008 earnings estimate dramatically from $3.75 a share to $1.80 on rising credit costs, a decline in loan origination, and thinner margins.
Orenbuch does believe the current lending environment will continue to weed out a number of smaller banks and lenders, leaving Countrywide well positioned to improve future margin performance.
He also cut his estimate for overall lending this year to $2.3 trillion from $2.5 trillion, and expects $1.8 trillion in mortgage loan funding next year.
Credit Suisse currently has an “outperform” rating on Countrywide, which subsequently did not change.
Earlier this week Lehman Brothers cuts its price target on Countrywide to $28 as well.
Share of Countrywide were flat in midday trading.
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