Odeon Capital upgraded shares of Goldman Sachs (NYSE:GS) from Hold to Buy with a price target of $355.75 in a note Thursday.
The firm’s analysts said the traditional company of the past 150-plus years has been recreated, and it is worth owning.
Analysts are competing to see “who can justify the lowest earnings estimate for Goldman Sachs’ second quarter” after GS warned it will not be a good quarter.
“The stock has fallen from a high of $388.86 last November to $326.40 at present, reflecting the dour outlook. What is most interesting, at this point, is the question as to why the issue did not tumble further,” stated analysts. “It is still selling at a 2% premium to book value when many banks are selling at discounts to net worth.”
“The reason for this is that investors are now looking beyond the coming quarterly results. They may be viewing this quarter as a one-time event that will clear away the firm’s problems.”
If it is true, the analysts believe the value of Goldman Sachs stock and its debt instruments should be associated with the uniqueness of its franchise and the fact that the investment banking business has turned around.
They believe that this is the correct way to assess this company. “There is a strong possibility that the company’s common stock will rally on the 19th when its earnings are produced,” analysts concluded.
