Goldman Sachs Boasts 'Near-Perfect' Q1 Results, 5 Analysts Zero In On 'Core Strengths'

Zinger Key Points
  • Goldman Sachs’ Q1 results demonstrated the franchise’s “considerable strengths” during an investment banking upturn, one analyst said.
  • Stronger-than-expected GB&M revenues more than offset higher compensation costs and lower A&WM contribution, another analyst added.

Goldman Sachs Group Inc GS and other financial stocks have been in focus as some of the sector’s biggest banks report first-quarter results.

Here are some key analyst takeaways from Goldman Sachs’ release.

  • Argus Research analyst Stephen Biggar upgraded the rating to Buy, while keeping the price target unchanged at $465.
  • JPMorgan analyst Kian Abouhossein reiterated an Overweight rating, while raising the price target from $424 to $433.
  • BMO Capital Markets analyst James Fotheringham maintained a Market Perform rating, while lifting the price target from $349 to $360.
  • Keefe, Bruyette & Woods analyst David Konrad reaffirmed an Outperform rating and price target of $485.
  • Oppenheimer analyst Chris Kotowski reiterated an Outperform rating and price target of $479.

Check out other analyst stock ratings.

Argus Research: Goldman Sachs’ first-quarter results demonstrated the “considerable strengths” of its franchise “during an investment banking upturn,” Biggar said in the upgrade note. The current spike in the investment banking environment “appears to have staying power,” he added.

Although the recent exit from several consumer businesses produced “significant losses” for Goldman Sachs, it removes a headline risk and “allows management to refocus on core strengths in capital markets,” the analyst wrote. He further stated that the consensus estimates for 2024 are likely to be revised “considerably higher.”

JPMorgan: Goldman Sachs reported strong quarterly results, with Equities continuing to gain market share, Abouhossein said in a note.

The analyst raised the earnings estimates for 2024 and 2025 from $32.54 per share to $34.88 per share and from $34.69 per share to $36.75 per share, respectively, citing “higher revenues, lower provisions only partly offset by higher costs.” He also raised the 2024 share buyback forecasts to $3.75 billion.

BMO Capital Markets: Goldman Sachs’ core earnings of $11.49 per share came ahead of the consensus of $8.69 per share, with “higher-than-expected GB&M revenues more than offset higher compensation costs and lower A&WM contribution,” Fotheringham said.

Keefe, Bruyette & Woods: Goldman Sachs reported core revenues of $14.2 billion, ahead of the estimate of $12.7 billion, Konrad said. He added, however, that core expenses of $8.56 billion was higher than expected, due to higher revenue related compensation expenses.

“Importantly, On-Balance sheet investments reduced $2.2B Q/Q,” the analyst wrote.

Oppenheimer: Goldman Sachs delivered a “near-perfect print,” demonstrating its “strong operating leverage to increased market activity,” Kotowski said.

“While Goldman cautions that its investment banking backlog fell in the quarter because of 1Q's strong transaction volumes, we do still think that private equity sponsors remain relatively inactive and that there is considerable upside to activity levels from here over time,” he added.

GS Price Action: Shares of Goldman Sachs had declined by 0.57% to $398.59 at the time of publication on Tuesday.

Image: Shutterstock

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Posted In: Analyst ColorEarningsLong IdeasNewsShort IdeasUpgradesPrice TargetReiterationTop StoriesAnalyst RatingsTrading IdeasArgus Researchbanksbig banksBMO Capital MarketsBruyette & WoodsChris KotowskiDavid KonradExpert IdeasJames FotheringhamJPMorganKeefeKian AbouhosseinOppenheimerStephen Biggar
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