Rochdale Securities Analyst Dick Bove cut his estimates for Goldman Sachs (GS) yesterday, explaining that trading activity is not up to Goldman’s normal standards.
“It looked as if it was going to be a very strong quarter for Goldman Sachs and other companies in the sector,” Bove said. “All of a sudden, when the Greece situation developed toward the end of January and there were statements made by the president that were not conducive to trading, then basically what happened was trading just dried up. Sector by sector you saw a significant decline in trading activity and as a result of that all of the…optimistic forecast we had at the beginning of the year had to go away .”
Bove cut his Q1 estimates on Goldman to $3.99 from $4.88. He maintains his buy rating at a $200 price target.
“For the year I’m at $18.04 now and that’s simply because I did not cut estimates for the second, third and fourth quarter and I didn’t cut the estimates for next year and the year after,” Bove said. “In terms of what a multiple should be on Goldman Sachs, I think you should at least expect a 10 multiple, which would be a price of somewhere around $180.”
