Shares of Goldman Sachs look too expensive at the moment, according to Keefe, Bruyette & Woods. Analyst David Konrad downgraded shares of the investment bank to market perform from outperform. He accompanied the change by lowering his target price on shares to $660 from $690. Goldman Sachs stock surged 58% in the last 12 months, resulting in an “elevated valuation” and more balanced risk/reward, the analyst wrote. To be sure, the stock trades at 13 times forward earnings, well below the S & P 500’s 22 multiple. Konrad’s updated price forecast is still 7% above where shares closed on Wednesday. GS 1Y mountain GS 1Y chart “GS still has catalysts including a strong trading environment, improving IB backdrop, restructuring its consumer business and improving margins in Asset Management; however, GS is at peak valuation with potential headwinds against strong market expectations owing to market uncertainty surrounding tariffs, inflation, interest rates and government policies,” Konrad wrote. “These uncertainties have led to a disappointing start of the year in investment banking, driving a recent rotation away from capital market stocks.” The analyst noted that Goldman Sachs will need to post strong March results to hit current expectations. However, Konrad added that he remains optimistic over the longer term, despite recent volatility. Going forward he expects a rebound in capital markets activity alongside more stable revenue growth in Goldman Sachs’ wealth management division to improve the bank’s returns. Despite the downgrade, most analysts are bullish on the stock. LSEG data shows that 14 of 23 analysts covering Goldman have a buy or strong buy rating, while another nine rate it as a hold. The average price target, however, signals upside of more than 5%.
