On Mar 5, 2014, we issued an updated research report on
The Goldman Sachs Group, Inc.
). The company reported disappointing fourth-quarter 2013 results
in January compared with the prior-year period. With the fall in
revenues, on the whole undisciplined expense management was
reflected. However, Federal Reserve's approval of its
re-submitted capital plan in 2013 depicts financial stability.
FIFTH THIRD BK (FITB): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
JMP GROUP INC (JMP): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
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Following the slump in fixed income trading revenues, Goldman's
fourth-quarter 2013 earnings per share came in at $4.60,
significantly below the year-ago figure of $5.60. However, it
surpassed the Zacks Consensus Estimate of $4.14. The company's
robust equity underwriting revenues and steady capital deployment
activities were the positives.
In 2013, the company repurchased shares worth $6.2 billion and
paid $988 million as common stock dividends. Moreover in Oct
2013, Goldman's board of directors announced a 10% hike in the
quarterly common stock dividend. Such a shareholder-friendly
approach is expected to act as a catalyst for the stock.
Goldman has outpaced the Zacks Consensus Estimate in all the four
quarters of 2013, with an average beat of 17.59%.
However, during 2013, Investment Banking operated in an
environment generally characterized by the ongoing macroeconomic
concerns, although there were positive developments in the U.S.
economy. If macroeconomic concerns persist and result in lower
levels of client activity, net revenues would likely be
Strong fundamentals have triggered an upward revision in the
Zacks Consensus Estimates for Goldman, as analysts become more
bullish on the stock's future performance. This is evident from
the movement witnessed in the Zacks Consensus Estimate that
increased 3.1% to $15.70 for 2014 and jumped 4.1% to $16.93 per
share for 2015, over the past 60 days.
Hence, Goldman currently carries a Zacks Rank #2 (Buy).
Key Picks from the Sector
Other stocks in the same sector worth considering include
JMP Group Inc.
Fifth Third Bancorp
The PNC Financial Services Group, Inc.
). All 3 carry a Zacks Rank #2.