Goldman Sachs Group Inc Stock Buy Recommendation Reiterated (GS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Goldman Sachs Group (NYSE: GS) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, attractive valuation levels and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • GOLDMAN SACHS GROUP INC has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GOLDMAN SACHS GROUP INC increased its bottom line by earning $14.15 versus $4.41 in the prior year. This year, the market expects an improvement in earnings ($14.40 versus $14.15).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 7.2% when compared to the same quarter one year prior, going from $2,109.00 million to $2,260.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, GOLDMAN SACHS GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

The Goldman Sachs Group, Inc. provides investment banking, securities, and investment management services, as well as financial services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Goldman Sachs Group has a market cap of $64.3 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 10.00, below the S&P 500 P/E ratio of 18.00. Shares are up 12.1% year to date as of the close of trading on Tuesday.

You can view the full Goldman Sachs Group Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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