On Jun 4, 2013, we reiterated our long-term recommendation on
The Goldman Sachs Group, Inc.
) at Neutral based on its well-managed global franchise, strong
capital base and recent investments. However, regulatory issues
coupled with fundamental pressures on the banking sector might
act as deterrents to the company's fundamentals.
Goldman reported its first-quarter 2013 earnings per share of
$4.29, significantly surpassing the Zacks Consensus Estimate of
$3.85. Moreover, reported earnings outpaced the prior-year
quarter's earnings of $3.92 per share.
Amid challenging global markets, better-than-expected results
were driven by Goldman's record revenues with an elevation in
client activity. Moreover, decreased operating expenses reflect
prudent expense management.
As a significant capital market player, Goldman could benefit
from the material growth of the global markets. This was
reflected in the first-quarter 2013 results, which improved
primarily due to buoyancy in the capital markets. Management's
preference for organic growth over acquisitions will be
beneficial with respect to cost and execution risk, over the long
However, Goldman's investment banking revenues reflected an
operating environment generally characterized by mixed activity
levels as a result of continued macroeconomic concerns in first
quarter 2013. If macroeconomic concerns continue and result in
lower levels of client activity, investment banking revenues of
the bank are likely to be adversely affected.
For Goldman, the Zacks Consensus Estimate for 2013 jumped 4.1% to
$14.44 per share, over the last 60 days. For 2014, the Zacks
Consensus Estimate remained stable at $15.07, over the same time
frame. Hence, Goldman carries a Zacks Rank #3 (Hold).
Other Major Banks to Consider
Some major banks that are worth considering include
The PNC Financial Services Group, Inc.
JPMorgan Chase & Co.
). All the 3 banks hold a Zacks Rank #2 (Buy).
COMERICA INC (CMA): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
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