Goldman Jumps the Most Since 2011. Analysts Had Cut it the Most Since 2011.

(Bloomberg) -- Goldman Sachs Group Inc. shares gained as much as 8.7 percent in Wednesday trading, the most intraday since October of 2011. The stock bounce comes after Wall Street analysts had become increasingly pessimistic about the bank’s prospects in the run-up to earnings, slashing estimates for Goldman’s fourth-quarter earnings-per-share by 29 percent, the most for a year-end quarter -- since 2011.

Goldman was the hardest hit among the six biggest banks, as analysts reduced estimates for Goldman, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley and Wells Fargo & Co. together by an average of 8.8 percent since the last quarter’s earnings reports. Analysts had also issued slew of ratings and price target cuts.

Pessimism about weak trading results had been well telegraphed, and turned out to be justified.

JPMorgan reported fourth-quarter FICC sales and trading revenue that missed analysts estimates on Tuesday, just like Citigroup on Monday, and JPMorgan’s adjusted earnings per share also trailed estimates. Citigroup had warned last month that its fourth-quarter fixed-income trading revenue would fall, and it was likely to miss targeted efficiency ratio for the year. Morgan Stanley is due to report on Thursday.

Read more: BofA and Goldman Crush Earnings, Lifting Bank Sector Stocks

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