FBR Capital Reiterates “Outperform” Rating for Goldman Sachs (GS)

in Gold Gold Investing Gold Investment by admin — March 11, 2010 7:01 am | no comments

Financial services juggernaut Goldman Sachs Group, Inc. ( GS ) saw its positive rating an price target maintained on Thursday b analysts at FBR Capital Markets. The analyst reiterated its “Outperform” rating on GS, as well as its $190 price target for the shares, which had closed at $171.94 on Wednesday. FBR Capital noted that “Following our meeting with Goldman Sachs’ CFO, David Viniar, we reiterate our Outperform rating and maintain our stance on GS shares as an FBR Top Pick. Within our coverage universe, GS is likely to accrete capital faster than peers, hence the relative Outperform rating. Additionally, we reiterate our belief that valuation remains compelling despite regulatory overhangs. We would characterize management comments as cautiously optimistic; and, although we expected 2010 results to be shy of those reported for 2009, we continue to expect GS to generate an ROE in excess of 15%, particularly in an environment that may allow more flexibility in compensation practices. While capital standards are likely to rise globally, we feel confident that mid- to high-teen ROEs are attainable, given our expectation of a commensurate increase in ROAs globally…Our price target of $190 is 11x our 2010 EPS estimate of $17.50, and 9.2x our 2011 EPS estimate of $20.5. Our price target represents 1.8x tangible book.” Goldman Sachs shares fell 74 cents, or -0.4%, in premarket trading Thursday. The Bottom Line We had removed shares