Bloomberg’s Andrew Frye reported that Goldman Sachs has lowered its 12-month price target on WaMu shares and is recommending its clients short sell WaMu shares. Previously, Frye reported, Goldman had forecast a $1 loss/share, but today raised that estimate to $3.30/share after concluding the firm could face $23 billion in mortgage-related losses. In the letter to shareholders, Goldman analyst James Fotheringham advised Goldman clients to sell short, Frye reported.

“Today’s recommendation by Goldman Sachs underscores the severity of risk-management failures at Washington Mutual and the need for immediate action to restore investor confidence,” CtW Executive Director Bill Patterson commented in response to the report. “The removal of directors Pugh and Stevers is a necessary step toward a stronger, more independent board that will improve risk oversight, recoup losses, and survive in today’s challenging economic environment.”

Posted by Anna Mumford on April 11, 2008 12:55 PM