Michael M. Santiago
- Argus upgraded Goldman Sachs (NYSE:GS) to Buy from Hold after the Wall Street bank's Q1 results showed "considerable strengths" in its franchise as investment banking activity revived.
- "The investment banking environment offered a few false rebounds in 2023, but the current surge appears to have staying power, with equity and debt underwriting showing sequential improvement, and industry-wide announced M&A deal value climbing in the high-teens year-over-year, in 1Q," analyst Stephen Biggar wrote in a note to clients.
- The firm's exit from consumer finance, a move that resulted in significant losses for GS, removes a headline risk and allows management to concentrate on its core strengths in capital markets, he added.
- After the Q1 beat, Biggar expects consensus estimates for 2024 to move "considerably higher." The average analyst estimate for 2024 EPS now stands at $35.50.
- Goldman Sachs (GS) stock gained 0.9% in premarket trading.
- Argus's Buy rating contrasts with the SA Quant rating and average SA Analyst rating, both at Hold, and aligns with the average Wall Street rating.