Wall Street Not Expecting Much from Goldman Sachs (GS) in Q2 on Tough Environment
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Price: $157.41 -1.21%
Rating Summary:
7 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Rating Summary:
7 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Trade GS Now!
Goldman Sachs (NYSE: GS) is trading fractionally higher ahead of Q2 results due ahead of the opening bell tomorrow.
Analysts on average see the investment bank earnings $1.13 on revenues of $6.28 billion. Notably, the analyst EPS consensus is down 43 percent over the last month while the sales consensus is down 15 percent.
Commenting recently on the quarter, analysts at Deutsche Bank said they expected GS to post a weak quarter of $1.05, driven by a weaker trading and investment banking environment and pressure in investing & lending and investment management. They see FICC trading revenues down ~50% quarter-over-quarter driven by weak activity wider spreads, and seasonality. Given hedges, we assume only modest positive DVA of about $100 million. On the equity side, they expect core revenue to decrease ~20% quarter-over-quarter, driven by derisking, lower markets/higher volatility, and tough comps. They assume ~$50 million in positive DVA. Investment banking revenues is also seen down ~20% q/q driven by seasonally weaker DCM and sluggish ECM and M&A. Total investing & lending revenue is likely to fall to a loss of roughly $200M in 2Q from a $1.9B gain in 1Q, as U.S. and global equity markets fell in the quarter, ICBC is down ~10%, and spreads widened. Finally, we expect slightly lower revenue in investment management, given lower fees due to weaker market levels in the quarter. On the expense side, they expect comp ratio of ~44% (roughly flat y/y), and non-comp expenses to be roughly flat q/q. They expect management to continue to be active in buybacks, but in light of the ongoing macro issues and regulatory uncertainty, they expect the firm to maintain conservative capital ratios and liquidity levels.
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Analysts on average see the investment bank earnings $1.13 on revenues of $6.28 billion. Notably, the analyst EPS consensus is down 43 percent over the last month while the sales consensus is down 15 percent.
Commenting recently on the quarter, analysts at Deutsche Bank said they expected GS to post a weak quarter of $1.05, driven by a weaker trading and investment banking environment and pressure in investing & lending and investment management. They see FICC trading revenues down ~50% quarter-over-quarter driven by weak activity wider spreads, and seasonality. Given hedges, we assume only modest positive DVA of about $100 million. On the equity side, they expect core revenue to decrease ~20% quarter-over-quarter, driven by derisking, lower markets/higher volatility, and tough comps. They assume ~$50 million in positive DVA. Investment banking revenues is also seen down ~20% q/q driven by seasonally weaker DCM and sluggish ECM and M&A. Total investing & lending revenue is likely to fall to a loss of roughly $200M in 2Q from a $1.9B gain in 1Q, as U.S. and global equity markets fell in the quarter, ICBC is down ~10%, and spreads widened. Finally, we expect slightly lower revenue in investment management, given lower fees due to weaker market levels in the quarter. On the expense side, they expect comp ratio of ~44% (roughly flat y/y), and non-comp expenses to be roughly flat q/q. They expect management to continue to be active in buybacks, but in light of the ongoing macro issues and regulatory uncertainty, they expect the firm to maintain conservative capital ratios and liquidity levels.
Stay tuned to StreetInsider.com's EPS Insider for GS earnings news as soon as it breaks.
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