Goldman Sachs Group (GS) has received a new Hold rating, initiated by BMO Capital analyst, .
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
BMO Capital’s rating is based on a combination of factors that reflect both the strengths and current valuation of Goldman Sachs Group. The firm is recognized as a leading franchise with robust operating leverage, benefiting from a strategic shift towards higher returns. However, the stock’s current trading price, which is near all-time highs and at 2.4 times its tangible book value, suggests that much of the potential upside from improved returns and regulatory relief is already accounted for.
BMO Capital acknowledges Goldman Sachs’ strong performance in its Asset and Wealth Management (AWM) and Global Banking and Markets (GBM) segments, which are well-positioned for growth. Despite this, the balanced risk/reward profile, due to the high valuation, leads to a Hold rating. The firm’s significant capital deployment capabilities, including aggressive stock buybacks and dividend increases, are noted, but potential risks from large acquisitions and the sustainability of stress test improvements temper the outlook.