Goldman shares hit highest level since financial crisis in post-election rally
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A sign is displayed in the reception of Goldman Sachs in Sydney, Australia, May 18, 2016. REUTERS/David Gray/File Photo
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By Olivia Oran and Sinead Carew
(Reuters) - Shares of Goldman Sachs Group Inc (NYSE: GS) on Wednesday climbed to their highest levels since the financial crisis, as the bank benefited from a post-U.S. presidential election rally.
The stock reached $220.77 in late morning trading, returning to a point not seen since December 2007.
Goldman was the biggest driver for the Dow Jones Industrial Average <.DJI>, adding 56.2 points out of a net gain of 66.6 points for the index. Goldman, like other Wall Street firms, has seen its stock soar after the Nov. 8 election, as investors expect banks to see benefits from rising interest rates and lighter regulation under a Donald Trump presidency.
In recent years, bank stocks have been largely thought of as utilities, rather than growth stocks. Post-financial regulations have forced banks to hold large amounts of capital which hurt returns.
But since the election, the KBW Nasdaq Bank Index has risen 11 percent, outpacing the broader Dow, which is up 4 percent.
Deutsche Bank on Tuesday hiked its price target for Goldman to $255 from $180, saying a stronger economy would bode well for the bank's businesses like mergers-and-acquisition advisory services, capital markets and trading.
Not everyone is so bullish on Goldman.
Nomura's Instinet research arm on Tuesday downgraded the bank from "buy" to "neutral," arguing that the potential benefits of a Trump presidency may already be priced into Goldman shares.
"We see limited upside for Goldman ... and we expect the shares to lag, as the 'rising Trump tide' euphoria begins to fade and investors become more selective," Instinet analyst Steven Chubak wrote in a note.
(Reporting by Olivia Oran and Sinead Carew in New York, Editing by Franklin Paul and Jonathan Oatis)
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