Keefe, Bruyette & Woods analyst David Konrad reiterated an Outperform rating on the shares of Goldman Sachs Group Inc (NYSE:GS) and raised the value forecast to $690 from $686.
The analyst notes Goldman Sachs posted an impressive quarterly performance, fueled by substantial gains in trading and continued growth in Asset Management.
In response to the analyst, trading revenue surged 33% year-over-year despite a troublesome comparison, with equities remaining stable quarter-over-quarter amid usual seasonal trends.
The firm’s strategy of leveraging its balance sheet was evident, with equity financing rising 16% from the previous quarter and 36% year-over-year.
While the stock stays pricey relative to historical multiples at 1.92x TBV, it continues to be considered a sexy option for those looking to speculate in capital markets, per the analyst.
As a result of robust revenues from capital markets and asset management, the 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 was strong demand for deal-making, with backlogs rising quarter-over-quarter.
The analyst notes that the strength in Markets was led by Equities, which stood out this quarter at $3.5 billion, surpassing expectations by $1.41 per share, driven by increased intermediation revenue from each derivatives and money products.
Management fees reached $2.8 billion, marking a 15% increase and a $0.15 per share beat in comparison with KBWe’s estimates.
In response to the analyst, Goldman Sachs also continued to scale back its on-balance-sheet investments, now totaling $36.5 billion.
Price Motion: GS shares are trading higher by 0.88% at $611.28 on the last check Thursday.
Photo via Shutterstock.
|
Date |
Firm |
Motion |
From |
To |
|---|---|---|---|---|
|
Feb 2022 |
Wells Fargo |
Downgrades |
Chubby |
Equal-Weight |
|
Feb 2022 |
Morgan Stanley |
Maintains |
Equal-Weight |
|
|
Jan 2022 |
Odeon Capital |
Downgrades |
Buy |
Hold |
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