FBR Capital Maintains an 'Outperform' on Goldman Sachs (GS); A Solid Start to 2011

FBR Capital maintains an 'Outperform' on Goldman Sachs (NYSE: GS), PT $190.

FBR analyst says, "We are maintaining our rating and 2012 earnings estimate on GS following 1Q11 results. Goldman Sachs posted sequential improvement in ROE from roughly 13% to 15%, which is in line with our view of long-term ROEs for the business. While we are encouraged by 1Q11 results, we do expect to see ROEs moderate in the near term as trading revenue is unlikely to improve beyond the 1Q11 run-rate and we view Investing & Lending revenue as facing a difficult quarter-over-quarter comparison. Additionally, we infer that capital management�is unlikely to play a material role beyond 1Q11 until there is improved clarity on ultimate regulatory capital levels. At best, we see stock buyback offsetting sharebased compensation rather than an aggressive re-leveraging of the balance sheet."

For more ratings news on Goldman Sachs click here and for the rating history of Goldman Sachs click here.

Shares of Goldman Sachs closed at $151.86 yesterday.

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