Goldman Sachs' Discussions With Corporate Clients Are Robust - Analyst Highlights Year-To-Date Growth In North America & Europe

BMO Capital Markets analyst James Fotheringham reiterated the Market Perform rating on Goldman Sachs Group, Inc. GS, raising the price target to $360 from $357.

Following GS’s fourth quarter big but messy beat, the analyst raised estimates by as much as +2% due to higher than previously modeled GB&M revenues.

The analyst applauds GS’s notably constructive comments regarding near-term capital markets recovery, just as management continues its efficacious execution on initiatives to transform business mix back to core competencies (e.g., dispositions/transitions of GreenSky, Marcus loans, PFM, and GM Card).

Management struck a notably confident tone on the conference call regarding near-term capital markets recovery, the analyst highlights.

GS’s discussions with corporate clients are robust, and YTD activity is solid in both North America and Europe, according to the analyst. 

However, the potential valuation implications of GS’s increasing exposure to more volatile GB&M revenues is worrisome, the analyst cautions.

Fotheringham raised the company’s core GS EPS estimates by +2% in 2024E (to $34.72 from $33.97) and +1% in 2025E (to $39.48 from $39.14) due to higher than previously modeled GB&M revenues.

Per the analyst, GS is not a catalyst stock; however, its shares should prove particularly valuation sensitive to the outlook for capital markets volatility and consumer credit quality.

Price Action: GS shares are trading lower by 0.13% to $376.70 on the last check Thursday. 

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