Market Overview

2 Reasons Why Dick Bove Downgraded Goldman Sachs To Sell

Share:
2 Reasons Why Dick Bove Downgraded Goldman Sachs To Sell
Related GS
After Basking In The Glow Of Netflix Results And Tuesday Rally, Pressure Seems Possible
10 Biggest Price Target Changes For Wednesday
' Good Companies to Weather Volatile US Stock Market (GuruFocus)

Vertical Group's Dick Bove, a notable bank analyst, downgraded Goldman Sachs Group Inc (NYSE: GS)'s stock from Hold to Sell amid a view the Wall Street bank is "troubled."

Bove has been an outspoken critic of Goldman Sachs' leadership and CEO Lloyd Blankfein for some time. The management team has been hesitant to change its core business model and are instead focusing on various business lines that are "no longer relevant" today. As a result, the company is "scrambling" to become "more of a lender than a trader" but at the same time management isn't making much information available.

However, the analyst shied away from turning bearish on Goldman Sachs' stock... until two recent events surfaced.

Options Market

The first is related to the company's withdrawal from several aspects of the options market, the analyst wrote in his note. While this move is consistent with the company's 2015 decision to longer serve as a market maker on the New York Stock Exchange, it serves as a signal that its trading business is in a "secular not cyclical decline."

Venezuela

Second, Goldman Sachs' ongoing relationship with Venezuela remains in place despite prior "highly questionable" transactions with the country. Specifically, Goldman Sachs "raised money for a troubled Portuguese bank that was lending the funds to Venezuela who paid the money to a Chinese contractor who was in jail for corruption."

Bottom line, Goldman Sachs' is showing investors it has "bad judgment" and the only possible remedy is "outside blood to change its direction."

Related Links:

Goldman Sachs Continues To Meander In Post-Earnings Trading Range

The Financials Trade Playing Out In Leveraged ETFs

Latest Ratings for GS

DateFirmActionFromTo
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Jul 2018OppenheimerMaintainsOutperformOutperform
Jul 2018Keefe Bruyette & WoodsMaintainsMarket PerformMarket Perform

View More Analyst Ratings for GS
View the Latest Analyst Ratings

Posted-In: bank stocks Dick Bove Lloyd BlankfeinAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (GS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ETTXWedbushInitiates Coverage On19.0
WINGWedbushDowngrades0.0
BMYCitigroupDowngrades57.0
INTCNomuraUpgrades0.0
HRZNKeefe Bruyette & WoodsDowngrades10.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

EUR/USD Forecast: Bearish Pressure To Aggravate Below 1.1575 Zone

CarGurus Could Be In The Fast Lane To Outperformance