Alexander Kulakov
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Alexander Kulakov in Moscow Financial Club,

Goldman Sachs (GS) – growth rally is over

Goldman Sachs (GS) – growth rally is over

Current price: $196.76
Target price: $170 (3m)

In our opinion, Goldman Sachs stock has lost all its attractiveness and now it is time to sell it. 

Last week GS has boosted upper Bollinger Band ($196.40) which could be the sign that we should expect no further growth. Therefore, the recommendation now is to hold the stock until it reaches the price of $200 and then to take profit. Otherwise, the price could fall to $170 per share. 

Here are several points confirming this point of view:
• In Q3 2015, the bank reported adjusted earnings per share of $2.64 on revenue of $6.86 billion, while analysts were expecting adjusted earnings per share of $3.00 on revenue of $7.12 billion;
• Now bank is acting in undesired economic conditions;
• There are some mistakes in management decisions – the bank activity was carried on the emerging markets, which led to some additional losses;
• Net income of $1.43 billion went down by 36% from the same quarter last year;
• Fixed-Income assets showed the performance which was 30% lower than one of the last year. 

Our expectations are not in the line with major analytics but we assume that combination of technical and fundamental analysis tells us that the stock price will go down soon.

Sources: Bloomberg, Yahoo Finance, Nasdaq