The Goldman Sachs Group, Inc. (
) is lower today, ahead of the company's fourth quarter earnings
release, expected out after the market closes today. Shares are
Goldman is expected to report EPS of $3.79 with revs of $9.0
billion. Last quarter, the New York, NY-based financial firm
reported EPS of $2.98 on revs of $8.9 billion, topping the
consensus. Looking at Q409, we see than GS produced EPS of $8.20 on
revs of $9.615 billion, benefiting from a lower compensation
Shares of the company gained 8.7% through the quarter, to $146.76
at the end of December. The stock is 3.1% since the end of the
quarter, and ended 2010 12.9% better.
GS shares are currently trading for a forward P/E of 9.9x FY11 EPS
estimates, relatively cheap when compared to 10.1x for Bank of
), 11.1x at Citi (
) and 11.6x at Wells Fargo (
Data from Bloomberg has 18 analysts with a Buy on GS, 9 with a
hold, and none suggesting to Sell. The analyst price target average
is $155.50, with a high of $170 and low of $137.
J.P. Morgan is expecting an EPS of $4.08. Investment banking revs
are expected to be 5% lower in the quarter, from $6.9 billion to
$6.5 billion. Fixed income revs are expected to be $3.4 billion,
and equity should come in at $1.8 billion.
JPM has an overweight rating with a $175 price target on the
Deutsche Bank likes the risk/reward ratio heading into FY11 given
"improving macro data points / capital market trends, increased
regulatory clarity / capital deployment opportunity, H111
seasonality, and valuations." They note that capital markets were
generally weaker than expected despite overall strength in equity
markets. Deutsche believes that FICC trading will be offset by IB.
Deutsche expects investors to focus more on the outlook rather than
the quarterly numbers.
DB also lists some potential catalysts for FY11: "1) A pick up in
M&A activity given a fertile environment (tons of cash,
challenging top line growth, and more policy clarity); 2) A healthy
underwriting backlog and good market levels; 3) Improving investor
confidence should bode well for trading activity; 4) Potential
capital deployment with regulatory clarity; 5) Less regulatory drag
with increased clarity on rules and congressional shift; and 6)
Some stock specific catalysts (GS capital & MS market
Deutsche has a Buy on the shares, and $210 price target.
Keefe, Bruyette & Woods is looking for an EPS of $3.65. They
currently have an Outperform on the shares, with a $210 price
Goldman Sachs is expected to release their Q410 earnings on
Wednesday, January 19, 2011, at approximately 7:00am EST. Stay
tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results withi0 n seconds of their release.