Keefe, Brouillette and Woods Analyst David Konrad reiterates an outperform rating on the stock Goldman Sachs Group Inc. (NYSE: GS ) and raised its price forecast to $690 from $686.
Analysts noted that Goldman Sachs reported impressive quarterly results, driven by a surge in trading and continued growth in its asset management business.
The analyst said that despite strict comparisons, trading revenue soared 33% year over year, while stocks remained stable quarter-on-quarter amid usual seasonal trends.
The company's strategy of leveraging its balance sheet is evident, with equity financing increasing 16% quarter-on-quarter and 36% year-over-year.
Analysts said that while the stock remains expensive relative to its historical price-to-earnings ratio of 1.92 times TBV, it is still considered an attractive option for those looking to invest in capital markets.
Analysts raised their 2025 earnings forecast by $1.80 to $47.15 and their 2026 earnings forecast by $0.65 to $53.00 due to strong revenue from capital markets and asset management.
Analysts said transaction demand was strong and backlogs were increasing quarter by quarter.
The analyst pointed out that the market's strength was led by stocks, which performed well in the quarter, reaching $3.5 billion, exceeding expectations of $1.41 per share, thanks to an increase in intermediation revenue from derivatives and cash products.
Management fees reached $2.8 billion, up 15% from KBWe's expectations, and earnings per share were $0.15 higher.
The analyst said Goldman Sachs has also continued to reduce on-balance sheet investments, which now total $36.5 billion.
price action: GS shares were up 0.88% at $611.28 at last check Thursday.
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| date | company | action | from | arrive |
|---|---|---|---|---|
| February 2022 | Wells Fargo | Downgrade | overweight | Equal weight |
| February 2022 | Morgan Stanley | maintain | Equal weight | |
| January 2022 | Odean Capital | Downgrade | purchase | catch |
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This article Goldman Sachs Stock May Be Pricey, But It's One of the Cheapest Ways to Invest in Capital Markets: Analyst originally appeared on Benzinga.com
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