NEW YORK - Investment bank Goldman Sachs Group Inc. is doing better than expected given the weak trading environment, a Bernstein analyst said Wednesday, boosting his earnings expectations through 2011.
THE OPINION: Bernstein analyst Brad Hintz said that in the tough equity market conditions of the June-September quarter, Goldman reined in compensation costs and other expenses, and made less risky trades. The bank's quarterly results topped analyst expectations despite a slowdown in its most profitable division, trading.
The bank may also have completed its toughest quarter, he said. Hintz expects that the Federal Reserve will launch a bond-buying program soon to support the economy, which should give Goldman a boost in the beginning of 2011. Its investment banking division should also benefit from increasing merger activity and initial public offerings.
Hintz raised his 2010 earnings estimate to $14.44 per share from $13.38 per share, and lifted 2011 estimates to $17.09 per share from $16.82 per share. In 2009, Goldman posted net income of $22.13 per share.
The analyst maintained his "Outperform" rating on Goldman's shares.
THE STOCK: Goldman shares rose 28 cents to $157 in midday trading. They have ranged from $129.50 to $187.55 in the past 12 months.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.