Analyst Upgrades Goldman Sachs To 'Buy'

NEW YORK (AP) — Goldman Sachs Group Inc. was upgraded Thursday by Rochdale Securities analyst Richard Bove amid a belief the bank "has solved its capital and cash flow challenges."

Bove upgraded Goldman to "Buy" from "Neutral" and increased his price target to $152 from $142.

"The company appears to be using the most conservative valuation techniques of any bank in the country," Bove wrote in a research note. "This implies asset write-ups in the future."

Many major banks have taken steep write-downs on investments, cutting the value of their holdings by hundreds of billions of dollars. If the value of those investments recover, the banks will be able to reverse the charges and reap large gains in future quarters.

The New York-based bank reported better-than-expected first-quarter profit earlier in the week as fixed income revenues surged. Goldman's trading revenues are likely sustainable and investment banking and investment management revenues could also rise, Bove said.

On Monday, Goldman said it earned $1.66 billion, or $3.39 per share, during the first quarter, beating the $1.64 per share forecast of analysts polled by Thomson Reuters. The bank then completed a $5 billion stock sale Tuesday as part of a plan to help repay the government $10 billion in bailout money it received as part of the Treasury Department's bank investment program last fall.