By Senad Karaahmetovic
Bank of America analyst Ebrahim Poonawala upgraded Goldman Sachs (NYSE:GS) to Buy from Neutral with a $380.00 per share price target (up from $360.00).
The analyst sees positive risk/reward from current levels in comparison to peers. Poonawala adds that GS offers “protection against the coming storm.”
“We see the stock as well-positioned to outperform in what is likely to be a worsening economic backdrop that could weigh more materially on the EPS outlooks for its balance sheet lending heavy peers. As a result, we see the relative risk/reward as attractive with shares trading at 1.1x P/TBV and 8.1x 2023e P/E,” Poonawala told clients.
Furthermore, the analyst notes that GS could benefit from a volatile geopolitical backdrop and monetary policy as these two could “drive elevated trading activity for the foreseeable future”.
On a negative note, Poonawala is below consensus of 22/23e EPS, but notes that “the risk of negative EPS revisions is discounted at current valuations.”
Goldman Sachs shares are up 1% in pre-open Wednesday.