Goldman Sachs Upgraded at Merrill

Goldman Sachs (GS Quote) was upgraded Thursday by a Merrill Lynch analyst, who argues the bank will post large gains in its trading, principal investing and advisory businesses.

Merrill analyst Guy Moszkowski awarded Goldman a buy rating, saying in a report that the company continues to benefit from reduced competition in trading, allowing it to capture higher margins. Goldman has lost major competitors in the past 18 months as Lehman Brothers went out of business and Bear Stearns and Merrill were bought by JPMorgan Chase (JPM Quote) and Bank of America (BAC Quote), respectively.

Moszkowski's optimistic view of Goldman's private equity business includes market-wide gains in credit investments and a rise in the share price of Industrial and Commercial Bank of China, in which Goldman has a sizeable stake.

Moszkowski also has a buy on Goldman competitors JPMorgan and Morgan Stanley (MS Quote), while he rates Citigroup (C Quote) underperform.

Goldman shares were up 2.9% to $142.52 in recent trading Thursday.