Financial analysts from Merrill Lynch & Co. and Goldman, Sachs & Co. dominated the American Banker annual survey of Wall Street sharpshooters, who are selected for the accuracy of their earnings-per-share forecasts.

The top gun among money-center bank stock analysts last year was Merrill's Judah S. Kraushaar, and Goldman's Lori Appelbaum ranked highest among regional bank trackers.

Michael R. Hughes of Merrill was the authority at gauging results for credit card companies. But Robert G. Hottensen Jr. of Goldman led the way among analysts who follow the general finance and mortgage companies. He was also second in the credit card category.

James P. Hanbury of Schroder & Co. was the best forecaster of 1998 profitability for brokerages and investment advisory companies. Vivek Juneja of J.P. Morgan Securities Inc. claimed the similar honor for savings institutions and government-sponsored enterprises.

Notably, veteran analyst Thomas H. Hanley of Warburg Dillon Read was ranked among the top three forecasters in three of the six categories of financial companies studied.

The survey is based on earnings estimates collected by First Call Corp.

To be sure earnings forecasting is only one of the analysts' roles and only one of several ways to measure achievement. The ability to pick winning stocks is another.

But earnings forecasting is a central function occupying a big part of analysts' time. And with good reason. Earnings prospects remain the key driver of stock valuations.

The sharpshooter survey uses the statistical concept of relative error. Individual scores are expressed as a percentage of average error by the peer group of analysts forecasting results for various categories of stocks.

As in golf, the lower the score, the better.

To make sure the survey process is uniform, a few ground rules are applied. For example, the money-center survey analyzes the work of 12 analysts who followed five or more of these companies and provided a minimum of 15 estimates to First Call.

The money-center group itself comprises six companies: Citigroup Inc., Chase Manhattan Corp., Bankers Trust Corp., J.P. Morgan & Co., BankAmerica Corp., and Republic New York Corp.

In the much larger regional bank category-44 institutions-the survey covers 23 analysts who tracked 10 or more companies and offered a minimum of 25 estimates.

Of course, some analysts follow a smaller group of regional banks, depending on how their coverage universe is structured. They may also track money-center banks, for instance, or work for a firm whose focus is largely limited to companies in a certain part of the country.

Among 17 analysts who covered at least five regional banks, instead of the minimum of 10, Mr. Kraushaar of Merrill was the star forecaster. He was followed by Ronald I. Mandle of Sanford C. Bernstein & Co. and Diane Glossman of Lehman Brothers.

All three analysts concentrate on money-centers but also follow such regionals as Bank of New York Co., Mellon Bank Corp., and State Street Corp.

A few caveats also apply to a statistical surveys of earnings forecasts.

It should be kept in mind that a cluster of highly accurate or highly erroneous estimates could skew the average earnings forecast for a company's earnings and influence many individual sharpshooter scores. That could happen if a company has had several quarters of volatile earnings or a recent earnings "surprise."

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