Buy Recommendation Reiterated For Goldman Sachs Group Inc

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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, attractive valuation levels, expanding profit margins, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.54% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 47.19% is the gross profit margin for GOLDMAN SACHS GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.32% is above that of the industry average.
  • GOLDMAN SACHS GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. 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 ($15.16 versus $14.15).
  • GS, with its decline in revenue, slightly underperformed the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 18.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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 $76.3 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 34% year to date as of the close of trading on Monday.

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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