UPDATE: UBS Downgrades Goldman Sachs (GS) to Neutral on Valuation

September 20, 2012 6:46 AM EDT Send to a Friend
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Price: $180.18 +1.32%

Rating Summary:
    11 Buy, 17 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 14 | New: 40
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(Updated - September 20, 2012 11:32 AM EDT)

UBS downgraded Goldman Sachs (NYSE: GS) from Buy to Neutral and maintained their $125 price target, saying risk/reward is less compelling.

"We are generally more cautious on the group overall, given the run up in the sector, up 31% since late July (vs 12% for the XLF and 8% for the S&P). GS shares have fully participated in this rally too, up 28% over the same time period," the analyst said.

Central bank action provides little benefit, they said. "We estimate that in a more constructive environment for cap markets, Goldman’s ROTE could move up to just under 13% for next year. However, given a 12% cost of equity, this would mean GS shares do not have much upside at 0.94x TBV, even in the unlikely case where that very optimistic scenario plays out."

For an analyst ratings summary and ratings history on Goldman Sachs click here. For more ratings news on Goldman Sachs click here.

Shares of Goldman Sachs closed at $119.02 yesterday.


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