Market Overview

Hard To Put A Shiny Spin On Goldman's Dull Q1 Results

Hard To Put A Shiny Spin On Goldman's Dull Q1 Results

Shares of Goldman Sachs Group Inc (NYSE: GS) fell more than 4 percent on Tuesday in reaction to the bank's first-quarter earnings report, which consisted of both and earnings and revenue miss.

Ahead of the earnings report notable bank analyst Mike Mayo named Goldman Sachs his top pick in the space. But after the report, other analysts are now scrambling to find a reason why the report came in worse than expected at a time when financials are for the most part reporting better than expected results.

Brennan Hawken of UBS maintains a Buy rating on Goldman Sachs with a $285 price target although he did acknowledge a few "noisy items" in the quarter, which for the most part cancel themselves out:

    1. Lower than expected taxes (10 cents per share total tailwind with six cents of that from a deferred comp related benefit being modestly higher than expected).
    2. A lower than expected comp ratio which represents a 13-cent tailwind.
    3. A higher than expected legal charge which represents an 18-cent headwind.

Soft Capital Markets, I&L

Hawken also highlighted Goldman Sachs' "soft" capital markets revenue performance in the quarter of $1.69 billion, which was below his $2.0 billion estimate.

Equities revenue fell year-over-year by 6 percent to $1.67 billion but did come in ahead of the analyst's $1.60 billion estimate. Also, total investment banking revenue was just in line with the analyst's $1.7 billion estimate but with a backlog that declined on a quarter-over-quarter and year-over-year basis.

Shifting over to Goldman Sachs' Investing and Lending (I&L) segment, revenue of $1.46 billion also fell short of the analyst's $1.75 billion estimate.

Bottom line, a $285 price target assumes the stock will trade at a roughly 12x multiple on Hawken's 2018 earnings per share estimate of $24.00.

At last check, shares of Goldman Sachs were down 4.74 percent at $215.54.

Related Links:

Bank Of America Inches Higher On Q1 Beat

Jim Cramer: Forget Bank Earnings, Focus On Facebook
Image Credit: By Dan DeLuca [CC BY 2.0 (], via Wikimedia Commons

Latest Ratings for GS

Jan 2021BarclaysUpgradesEqual-WeightOverweight
Nov 2020Morgan StanleyDowngradesEqual-WeightUnderweight
Oct 2020Credit SuisseMaintainsOutperform

View More Analyst Ratings for GS
View the Latest Analyst Ratings


Related Articles (GS)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings Long Ideas News Guidance Analyst Ratings Movers Trading Ideas Best of Benzinga

Latest Ratings

MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at