Goldman Sachs: Financial Winner (Update 1)

Updated to include a discussion on JPMorgan Chase, along with market close information and updated total returns.

NEW YORK ( TheStreet) -- Goldman Sachs ( GS) was the Winner among the largest U.S. financial names on Thursday, with shares rising over 5% to close at $121.13.

The broad indexes all saw moderate gains, after the Labor Department reported that initial jobless claims during the week ended Feb. 25 declined to 351,000 from a revised 353,000 the previous week. The four-week average for initial jobless claims declined to 354,000 from a revised 359,500.

The Commerce Department reported that personal incomes rose 0.3% to $37.4 billion in January, while personal spending rose 0.2% to $23.2 billion for the month.

The The KBW Bank Index ( I:BKX) rose over 1% to close at 45.93, 19 of the 24 index components showing gains for the session.

Goldman Sachs's shares have now returned 34% year-to-date, following a painful 46% decline in 2011.

The shares trade for just above the company's reported Dec. 30 tangible book value of $119.72, and for 11 times the consensus 2012 earnings estimate of $11.50, among analysts polled by Thomson Reuters. The 2013 consensus EPS estimate is $13.36.

KBW analyst David Konrad on Thursday reiterated his "Outperform" rating for Goldman, with a $140 price target, despite a couple of negative disclosures in the company's annual 10-K filing on Wednesday.

Goldman disclosed that it had received a Wells notice from the Securities and Exchange Commission, regarding its offering documents for a $1.3 billion subprime mortgage securitization in 2006, and added that it expected to face additional regulatory action and litigation in connection with the mortgage pool. Konrad said that "although the headline is negative, GS is well reserved for potential litigation and should not be materially impacted by the investigation."

Goldman was also named in a class action lawsuit springing from the bankruptcy of MF Global, in connection with to offerings of MF Global convertible notes, for failing to adequately disclose MF Global's European debt exposure. With the notes in question totaling $575 million and Goldman's underwritten portion totaling $214 million, Konrad said he didn't "believe this issue was material.

Konrad estimates that Goldman Sachs will earn $11.70 a share in 2012, followed by EPS of $14.00 in 2013.

Interested in more Goldman Sachs? See TheStreet Ratings' report card for this stock.

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