NEW YORK (TheStreet) -- Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report was upgraded to "buy" from "neutral" at Bank of America/Merrill Lynch on Wednesday morning. The firm's price target on the stock remains unchanged at $220.
Goldman Sachs stock dropped 15% from recent highs, creating an attractive entry point, according to BofA/Merrill Lynch. The firm notes that volatility may press on third quarter results, but it is priced into the shares.
The firm expects the volatility to be transitional and Goldman Sachs to ultimately benefit.
"GS is one of the most skilled firms in the industry when it comes to managing through new regulations, innovation, and protecting the franchise in times when risk management matters most," BofA/Merrill Lynch said in a note.
Technology and innovation, as well as risk management, will be vital for success in the future, BofA/Merrill Lynch said.
Shares of Goldman Sachs were up 2.09% to $189.78 in early morning trade on Wednesday.
Separately, TheStreet Ratings team rates GOLDMAN SACHS GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLDMAN SACHS GROUP INC (GS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was trading a year ago, GS's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GOLDMAN SACHS GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOLDMAN SACHS GROUP INC increased its bottom line by earning $17.07 versus $15.47 in the prior year. This year, the market expects an improvement in earnings ($17.88 versus $17.07).
- GS, with its decline in revenue, slightly underperformed the industry average of 6.9%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, GOLDMAN SACHS GROUP INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GS Ratings Report