Goldman Hits New 52-Week High on Lawsuit Dismissal - Analyst Blog

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Shares of The Goldman Sachs Group, Inc. ( GS ) scaled a new 52-week high of $182.07 in the first half of the trading session on Sep 3. The stock closed the session at $179.60, reflecting a year-to-date return of 1.5%. The trading volume for the session was 2.37 million shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given the upward estimate revisions it witnessed over the last 60 days.

Growth Drivers

Dismissal of an antitrust lawsuit looming over Goldman was the primary growth driver. On Aug 29, U.S. District Judge Katherine B. Forrest disposed the suit, which alleged that the defendants, which included Goldman's unit Metro International Trade Services LLC, conspired in hoarding aluminum stock to push up prices.

Along with other defendants, Goldman was given a clean chit by Forrest after she acknowledged that the complaints did not convincingly indicate that the defendants deliberately schemed on a collective basis to raise the prices.

The lawsuit, which was filed in 2013, accused Goldman Sachs, JPMorgan Chase & Co. ( JPM ), Glencore Plc and LME, among others, of hoarding aluminum and triggering an artificial rise in the metal price since May 2009.

Amid the never ending regulatory issues and political scrutiny on banks' ownership of the physical commodity business, this latest discharge of lawsuit brings respite for this banking giant, reassuring investors to some extent as well.

However, regulatory inquiry regarding the metal business is still impending on Goldman. Last week, in a $3.15 billion settlement, the company ended its legal fight with the Federal Housing Finance Agency (FHFA), the conservator for Freddie Mac ( FMCC ) and Fannie Mae ( FNMA ).

Estimate Revisions Show Strength

Over the last 60 days, the Zacks Consensus Estimate for 2014 witnessed a 6.6% upward revision to reach $16.75 per share. For 2015, the Zacks Consensus Estimate rose 2.5% to $17.37 per share over the same time frame.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: JPM , FMCC , FNMA , GS

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