Prudential, MetLife Shares Fall On Write-down Fears
October 20, 2008
NEW YORK, Oct 20 (Reuters) - The shares of giant life insurers Prudential Financial and MetLife Inc fell on Monday as Goldman Sachs cut its ratings on the companies, citing possible write-downs on investments.
Goldman Sachs, in a research note, cut its rating on Prudential Financial (PRU) to "sell" and reduced its 12-month price target on the stock to $40 a share from $58.
Analyst Tom Cholnoky said Prudential's significant exposure to residential and commercial mortgage-backed securities and commercial real estate loans could trigger between $1 billion and $4 billion in impairments -- an amount that could wipe out the insurer's $1 billion in excess capital.
Prudential shares fell 8.26 percent to $38.33 in late morning trading.
Goldman cut MetLife (MET) to "neutral" from "buy" and reduced its 12-month target on the stock to $38 a share from $42.
Cholnoky noted that MetLife had raised $2.3 billion in capital, it could still see between $1 billion and $6 billion in losses on assets, denting its $7 billion in excess capital.
MetLife shares fell 2.28 percent to $30.43 in late morning
trading on the New York Stock Exchange.
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