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Expectations continue to deteriorate for Goldman Sachs. Credit Suisse analyst Howard Chen now sees Goldman delivering a 70 cent per share loss on Q3, down from his previous call for a 95 cent per share profit.
Chen blames “difficult market conditions, very low client risk client appetite and a material decline in risky asset prices.”
His revision is particularly brutal relative to others. Last week, Deutsche Bank revised its earnings estimate from a 50 cents profit to a 25 cent loss. And the week prior, Barclays cuts its estimate from a $2.40 per share profit to a 35 cent loss.
Nevertheless, Chen thinks Goldman is a buy. Although, he did reduce his price target to $145 from $155.
While it’s been a challenging call, we view GS as a best-in-class brokerage franchise with solid market positioning across myriad businesses and a strong balance sheet. With a proven ability to gain and sustain client market share across the franchise and a long track record of performance, we expect GS will continue to deliver fundamental results that are at the high end of the peer group. We believe this should sustain premium-to-peer earnings and book value growth over the course of the cycle.