Goldman Sachs Group Inc (NYSE:GS) reported on Tuesday upbeat earnings for its third quarter.
The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.
Oppenheimer On Goldman Sachs
Analyst Chris Kotowski reiterated an Outperform rating while raising the price target from $577 to $614.
Goldman Sachs reported earnings of $8.40 per share, beating consensus of $6.89 per share, with core operating earnings of around $9.02 per share, Kotowski said in a note. "This, in turn, would put core ROTCE at ~11.7% for the quarter, which is not bad in that we still see the investment banking environment as pretty weak," he added.
The results were driven mainly by stronger-than-expected investment banking and equity trading revenues, the analyst stated. The bank's total revenues came in at $12.7 billion, up 7.5% year-on-year, Kotowski further said.
Check out other analyst stock ratings.
RBC Capital Markets On Goldman Sachs
Analyst Gerard Cassidy maintained a Sector Perform rating while raising the price target from $500 to $558.
Excluding one-time items, the bank's core earnings are estimated at $9.02 per share, Cassidy said. "Overall, GS posted a strong quarter driven by better-than-expected total revenues and lower-than-expected expenses," he added.
Goldman Sachs continues to transition away from the consumer banking business and towards its traditional investment banking, equity and FICC trading and wealth/asset management businesses, the analyst stated. "All five banks that reported today recorded larger provisions in the quarter compared to the prior quarter, largely reflecting loan growth and the current economic outlook," he further wrote.
Bank of America On Goldman Sachs
Analyst Ebrahim Poonawala reaffirmed a Buy rating while lifting the price target from $563 to $575.
The earnings beat was driven by stronger capital market results, with investment banking revenues growing 20% year-on-year versus consensus of 9% and trading revenues up 2% versus Street expectations of an 8% decline. Poonawala said in a note. "The combination of resilient trading revenues (+8% YTD) and rebounding investment banking activity should drive positive EPS revisions," he added.
"Given the inherent unpredictability of these revenues, the Street is unlikely to fully reflect this in its EPS forecast," the analyst stated. He added, however, that higher confidence on a recovery in M&As and IPOs "should drive continued investor interest in adding exposure to the stock."
GS Price Action: Shares of Goldman Sachs had risen by 1% to $527.61 at the time of publication on Wednesday.
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