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Keefe, Bruyette & Woods analyst David Konrad reiterated one Pass the rating on the actions of Goldman Sachs Group Inc (NYSE:GS) and raised the expected price to $690 from $686.
The analyst notes that Goldman Sachs posted a impressive quarterly performancedriven by substantial gains in trading and continued growth in asset management.
According to the analyst, trading revenue rose 33% year-on-year despite a difficult comparison, with the stock holding steady for the quarter amid the usual seasonal trends.
The company’s strategy of leveraging its balance sheet was evident, with variable income financing up 16% compared to the previous quarter and 36% year-on-year.
Although the stock remains expensive relative to historical multiples at 1.92x TBV, it is still considered an attractive option for those looking to invest in capital markets, according to the analyst.
Due to robust capital markets and asset management revenue, analyst raises 2025 earnings estimate to $1.80 to $47.15 and 2026 earnings estimate to 0.65 and $53.00.
The analyst says there was strong demand for deal-making, with backlogs increasing from quarter to quarter.
The analyst notes that Markets’ strength was led by Equities, which posted $3.5 billion in the quarter, beating expectations by $1.41 per share, driven by increased brokerage income from both derivatives and cash products.
Management fees came in at $2.8 billion, up 15% and up $0.15 per share compared to KBWe’s estimates.
Goldman Sachs also continued to reduce its balance sheet investments, which now total $36.5 billion, according to the analyst.
Price action: Shares of GS are trading up 0.88% at $611.28 as of last check on Thursday.
Photo via Shutterstock.
|
date |
firm |
action |
from |
A |
|---|---|---|---|---|
|
February 2022 |
Wells Fargo |
Discounts |
overweight |
equal weight |
|
February 2022 |
Morgan Stanley |
keep |
same weight |
|
|
January 2022 |
Capital Odeon |
Discounts |
Purchase |
hold on |
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This article Goldman Sachs stock may be expensive, but it’s one of the cheapest ways to invest in capital markets: analyst originally appeared Benzinga.com
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