MKM Reiterates Buy On Goldman Sachs, Boosts Price Target

In a report published Monday, MKM Partners analyst David Trone maintained a Buy rating on

, while raising the price target from $213 to $245. Goldman's share price has appreciated by nearly 16 percent in the past three months. ‘…we continue to believe Goldman is a leading franchise and innovator that has continually shown an ability to generate returns near the higher end of its bulge-bracket peers," analyst David Trone mentioned. "Since GS is a highly liquid stock with strong information dynamics, we believe most investors would be happy with 15% upside to warrant buying the shares (vs. 20%+ for a less liquid and/or information risk name)," Trone mentioned. While Goldman's 1Q15 ROE was 14.7 percent, the full year rate is expected to be lower, since the quarterly figure was aided by seasonal factors. The company's future ROE is expected to be driven by more normalized Europe and Fed rate hikes. In the report MKM Partners noted, "Factoring in regulatory constraints, continuing reasonable cost control, and assuming a steady rise in the global economy, we have confidence that GS will be able to maintain at least 11.9% ROE at 1H16-end." Goldman's 2015 revenues are expected to grow 9 percent, driven by trading, advisory and equity UW revenues.