CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
GS has course corrected its failed strategy to expand into consumer banking, with a renewed focus on its strong core franchise. We lower our target by $7 to $340 (below the $379 consensus) on a forward P/E of 9.9x our 2024 EPS estimate, in line with the three-year historical average of 9.7x. We lower our 2023 EPS view by $2.60 to $23.85 and 2024’s by $1.05 to $34.20, with a revenue forecast of $46.5B (prior $45.9B) in 2023 and $50.5B ($49.9B) in 2024. GS posted Q3 2023 EPS of $5.47, a $0.06 earnings miss to consensus. In Global Banking & Marketing (+6% Y/Y and 68% of total revenue), FICC trading was -6% and equity trading +8%. Investment Banking revenue was +1% Y/Y with debt underwriting +27% and M&A -15%, while equity underwriting was +26%. We think GS will pursue acquisitions to gain scale in Asset and Wealth Management, which posted revenue -20% Y/Y in Q3 2023, primarily due to a steep decline in private banking and lending fees; equity investments realized a $212M loss versus the $721M gain a year ago.