Keefe, Bruyette and Woods analyst David Konrad reiterated a Outperformance on the actions of Goldman Sachs Group Inc. (NYSE: GS) and increased the price forecast from $686 to $690.
The analyst notes that Goldman Sachs published a impressive quarterly performancefueled by substantial gains in trading and continued growth in asset management.
According to the analyst, trading revenue jumped 33% year-over-year despite a tough comparison, with stocks remaining flat quarter-over-quarter against the backdrop of usual seasonal trends.
The company’s strategy to leverage its balance sheet was evident, with equity financing up 16% from the previous quarter and 36% year-over-year.
Although the stock remains expensive compared to historical multiples of 1.92x TBV, it is still considered an attractive option for those looking to invest in the capital markets, according to the analyst.
Due to robust capital markets and asset management revenues, analyst raises 2025 earnings estimate by $1.80 to $47.15 and 2026 earnings estimate by 0.65 $ to $53.00.
The analyst says there has been strong demand for deal-making, with delays increasing quarter-over-quarter.
The analyst notes that market strength was driven by stocks, which stood out this quarter at $3.5 billion, beating expectations of $1.41 per share, thanks to increased revenue from intermediation from both derivatives and spot products.
Management fees reached $2.8 billion, an increase of 15% and $0.15 per share above KBWe’s estimates.
According to the analyst, Goldman Sachs also continued to reduce its balance sheet investments, which now stand at $36.5 billion.
Price action: GS shares are trading up 0.88% at $611.28 at last check Thursday.
Photo via Shutterstock.
Date | Farm | Action | From | HAS |
|---|---|---|---|---|
February 2022 | Wells Fargo | Downgrades | Overweight | Equal weight |
February 2022 | Morgan Stanley | Maintains | Equal weight | |
January 2022 | Capital of the Odeon | Downgrades | Buy | Socket |
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