Goldman Sachs Set to Impress

Goldman Sachs (GS Quote) watchers are looking once again for a big contribution from the bank's various trading businesses to drive second-quarter profits when the bank reports on Tuesday.

Goldman is expected to earn more than $1.7 billion, or $3.47 a share, according to consensus estimates of 16 analysts surveyed by Thomson Reuters . The company earned $4.58 a share in the year-ago quarter.

"The spreads remain wide and volatility is high," wrote Dick Bove, an analyst at Rochdale Securities.

Several analysts also cited reduced competition as a continued benefit for Goldman, as the credit crisis drove Lehman Brothers out of business and Bear Stearns and Merrill Lynch into the arms of JPMorgan Chase (JPM Quote) and Bank of America (BAC Quote), respectively.

Even some noted bears are bullish on Goldman. The stock rallied as much as 5.6% on Monday after analyst Meredith Whitney, head of Meredith Whitney Advisory Group, published a report arguing Goldman will benefit from a massive surge in debt issuance as government and corporate entities try to plug funding gaps.

"In the past, [Goldman] shares were a great play on equity markets and expansive global GDP. While that may still hold true down the line, our thesis today is that we expect [Goldman] to be the key competitor in some of the most unpredictable markets: government, corporate, and municipal debt," Whitney wrote. Her price target of $186 is more than 30% higher than where Goldman's shares closed on Friday. Research firm Institution Risk Analytics also upgraded Goldman on Monday.