Instinet Downgrades Goldman Sachs (GS) to Neutral; Less Golden Under Trump 'Goldilocks'
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Instinet (formerly Nomura) downgraded Goldman Sachs (NYSE: GS) from Buy to Neutral with a price target of $201.00, saying a Trump Goldilocks” Scenario Favors eBrokers / Smids vs. Universals.
Steven Chubak commented, "The postelection rally in financials has sparked significant client inbound, and, despite a flurry of sell-side downgrades, many believe that shares will continue to run, as the cumulative benefit from potential GOP policy changes / resulting macro effects are not fully baked in. To provide perspective, we analyze each potential earnings lever: lower tax rate; higher rates / steeper curve; accelerated capital return; and stronger loan growth / M&A / trading. Others have undertaken a similar exercise, but feedback suggests complexities surrounding tax, capital, and valuation implications, as well as “multiplier” benefits from a lower tax regime, are not fully appreciated. Our analysis highlights a number of attractive alpha / pair trade opportunities."
In Universals, the firm prefers BofA.
Shares of Goldman Sachs closed at $210.35 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Downgrades
Related EntitiesGoldman Sachs, Bank of America, Nomura, Earnings
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