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.

Shares of JPMorgan Chase ( JPM) rose 3% to close at $40.32.

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JPMorgan's shares have now returned 22% year-to-date, following last year's 20% drop.

The shares trade for 1.2 times tangible book value, according to HighlineFI, and for nine times the consensus 2012 EPS estimate of $4.67. The 2013 EPS estimate is $5.44.

Following the company's Investor Day presentation, Citigroup analyst Keith Horowitz said on Wednesday that he "came away incrementally impressed with the fundamental progress at JPM, and reiterate our Buy rating as we see this as the best value in the group."

Horowitz's price target for JPMorgan Chase is $45.00. The analyst said he raised his earnings estimates for JPM "to reflect a more sanguine view on expense control in 2012, plus we are now looking for a slightly faster pace of mortgage/foreclosure related servicing costs over the next 3 years."

The analyst raised his 2012 EPS estimate for JPMorgan to $4.90 from a share in 2012 from $4.40, and his 2013 EPS estimate to $5.60 from $5.00.

Interested in more JPMorgan Chase? See TheStreet Ratings' report card for this stock.

Shares of Bank of America ( BAC) rose 2% to close at $8.11.

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The shares have now returned 46% year-to-date, following a 58% drop in 2011.

The Wall Street Journal on Thursday reported that Bank of America was "working on sweeping changes that would require many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain certain balances."

A Bank of America spokesperson said that "there is nothing new in the Wall Street Journal article," since the company had previously disclosed the "new solutions we are testing in Massachusetts, Arizona and Georgia, and all of them offer ways to avoid monthly maintenance fees. If customers do their basic banking online or via ATM, there are no fees."

The spokesperson confirms that a customer who only has a checking account with Bank of America, can avoid all service fees by switching over to electronic banking, which includes free electronic bill paying.

The company's new fee plan seems to have a better chance of being accepted by its customers than the failed plan last year to charge monthly fee of $5 monthly fee for debit card privileges, since a checking account customer can avoid monthly fees so easily by switching to electronic banking, which provides the added benefit of free bill paying, which means no paying for postage or for printing checks.

Bank of America's shares trade for 0.7 times tangible book value, according to HighlineFI, and for 11.5 times the consensus 2012 EPS estimate of 71 cents. The consensus 2012 EPS estimate is $1.20.

Interested in more Bank of America? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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