UBS analyst Brennan Hawken argued that Goldman will report earnings below analysts' consensus expectations in 2018, and lowered his price target to $230 from $255.
"Shares seem to reflect a rebound in revs but we have limited confidence in that. We are downgrading GS shares ... as the market seems to be pricing an inflection in their FICC [fixed income, currency and commodities] revenues despite the recent weakness, suggesting a recovery is needed to justify 2018 consensus," Hawken wrote.
Goldman's second quarter fixed income, currency and commodities revenue fell 40% from the last year.
"While trading could rebound, that has not happened over the past year for GS absent a surprise event such as Brexit or the Trump election and we have difficulty relying on such an event in order to justify a bullish thesis," Hawken wrote.
Watch More with TheStreet:
- Sears' Kenmore Products on Amazon Is Hurting Home Depot, Jim Cramer Explains
- Consuelo Mack: There Are Many More Women Getting Into Financial Journalism
- Chipotle May Not Recover Until 2019 After Latest Health Scare
- 5 Celebrities That Have Lost Big in Real Estate
- O.J. Simpson Wasn't the First or the Last Athlete to Kiss a Major Endorsement Goodbye