Goldman Sachs analyst Daniel Paris on April 6 downgradedGreenhill & Co.Inc. to "neutral" from "buy," saying weak first-quarterEPS can lead to dividend sustainability debate and cause shares to trade on astraight price-to-earnings valuation basis.
Although the acquisition of Cogent Partners met expectations and Greenhillsaw announced M&A volume accelerate, the combination of longer completiontimelines on deals, departures of several senior bankers and a choppier marketbackdrop has resulted in a negative earnings revisions cycle and a compressing price-to-earningsmultiple, he said.
The analyst said that if first-quarter EPS materially fallsbelow consensus estimates, the company's 2016 price-to-earnings multiple willscreen as expensive relative to peers.
The analyst lowered the 12-month price target to $25 from$33. He lowered EPS estimates for 2016 to $1.33 from $1.75 and for 2017 to $1.70from $2.00.