© Reuters. Jefferies bullish as they await Goldman Sachs (GS) investment day update
By Michael Elkins
Jefferies reiterated its Buy rating on Goldman Sachs (NYSE: NYSE:) and raised their price target on the stock to $420.00 (From $393.00) ahead of the company’s investment day on Feb. 28.
Jefferies analysts expect GS to reiterate their 15%-17%+ medium-term ROTCE targets and 60% efficiency ratio. Recent cost initiatives focused on reducing headcount are expected to result in $475 million in operating ratio savings (~$200 million realized by 2023). However, this is only 2% of GS’s cost base in 2022 (3% of total costs).
With fundraising strength and wealth management revenue growth, Jefferies expects higher growth targets. Specifically, third-party alternative funding sits at $179 billion against a target of $225 billion (’20-’24), of which GS alone raises $72 billion by 2022. In 2022, GS earns $8.8 billion in management fees against a target of $10 billion in 2024, creating plenty of opportunities to accelerate this goal.
“For our first detailed update since 2019, we head to Investment Day with the expectation of a thorough review of businesses, with a particular focus on performance,” the analysts wrote in a note. performance, streamlining consumer strategy, and future strategic organic growth updates We expect insights into market share opportunities across IB and commercial businesses , which are particularly strong areas of enforcement. Factors to be considered when thinking about medium- and long-term targets. Considering all these factors, we expect GS’s outlook to be balanced, with green shoots of near-term strength. (i.e. trading, raising capital) and persistent long-term optimism.”
GS will hold its investor day meeting on February 28 in New York.
GS shares rose 0.41% in midday trading Friday.
