NEW YORK ( TheStreet) -- E-Trade Financial (ETFC - Get Report) could double its earnings over the next three years, according to Goldman Sachs, which argues about 70% of that growth is not reliant upon interest rates moving higher.
E-Trade's shares were up more than 2% to $15.89 in pre-market trading following a Goldman upgrade to "buy" from "neutral." Goldman has a 12-month price target of $19 for E-Trade.
While Goldman's analysts see E-Trade benefitting from an expected rise in interest rates along with rivals Charles Schwab Corp. (SCHW - Get Report) and TD Ameritrade (AMTD - Get Report), they argue other "idiosyncratic" factors will play a bigger role.
"We think that most of the upside to ETFC's earnings originates from a contracting loan book, prudent risk management, and better capital allocation following the regulatory approval of the dividend from the bank to the holding company," the analysts write.-- Written by Dan Freed in New York. Follow @dan_freed