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:
Soft Capital Markets, I&L
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 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia CommonsHawken 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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.