Why These 3 Goldman Sachs Analysts Are Focusing More On Restructuring Than Results

Zinger Key Points
  • Goldman’s organizational changes represent “more a streamlining than repositioning,” an analyst said.
  • The restructuring reflects the consumer banking segment’s failure to achieve profitability, another analyst stated.
Why These 3 Goldman Sachs Analysts Are Focusing More On Restructuring Than Results

Goldman Sachs Group Inc. GS reported a decline in sales and earnings for the third quarter, although both metrics topped Street expectations.

JMP Securities

Analyst Devin Ryan reiterated a Market Outperform rating and price target of $470.

The bank’s quarterly print was “solid,” given the challenging macro backdrop, “demonstrating the resiliency of its diversified business model, while the organizational changes it announced was “more a streamlining than repositioning,” Ryan said in a note.

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“On the call, management repeatedly reiterated that its fundamental strategy remains the same and that it remains committed to the medium-term financial targets that it laid out earlier this year,” he added.

RBC Capital Markets

Analyst Gerard Cassidy maintained a Sector Perform rating and price target of $370.

“GS is one of the preeminent global investment banks but even with its leading position, market conditions negatively impacted nearly all of its businesses,” Cassidy wrote.

“As it navigates through these markets, we expect it to continue to be a strong steward of shareholders' capital while simultaneously managing its capital levels to meet all regulatory requirements,” he added.

“The upcoming restructuring of its business groups points to its focus on continuing with its “One Goldman Sachs” approach to clients but also its inability to achieve profitability in its consumer banking business.”

See Also: Goldman Sachs Boss Predicts Recession - 'Time To Be Cautious'

BMO Capital Markets

Analyst James Fotheringham reaffirmed an Outperform rating, while reducing the price target from $470 to $469.

“Despite GS’s 3Q22 revenue-driven beat, we leave out-year estimates essentially unchanged,” Fotheringham said. “GS is scaling back its prior growth ambitions for Consumer banking, and folding it into a new Asset and Wealth Management operating segment to facilitate more focused customer acquisition."

GS Price Action: Shares of Goldman Sachs had declined by 0.13% to $313.44 at the time of publication Wednesday.

Posted In: BMO Capital MarketsDevin RyanGerard CassidyJames FotheringhamJMP SecuritiesRBC Capital MarketsAnalyst ColorEarningsNewsPrice TargetReiterationAnalyst Ratings