![]() The financial sector’s recent sell-off has created buy-the-dip opportunities for both. Conclusion: Long-Term Bullish on GS and MSīoth Goldman Sachs and Morgan Stanley look like long-term Buys, but for different reasons. At $100.30, the average Morgan Stanley stock price target implies upside potential of 13%. Morgan Stanley has a Moderate Buy consensus rating based on 10 Buys, six Holds, and two Sell ratings assigned over the last three months. While it may not offer as much near-term upside as Goldman because its stock hasn’t fallen as far, Morgan Stanley is in an attractive position for long-term growth.įinally, Morgan Stanley has an attractive trailing dividend yield of 3.4%. I believe the banking sector’s recent sell-off has created a buying opportunity in Morgan Stanley. The market has punished Goldman for its identity crisis this year while boosting Morgan Stanley. However, the firm deserves this premium versus Goldman due to its wise business model decisions. Morgan Stanley’s valuation multiples also suggest a long-term bullish view may be appropriate.Īt a P/E of 14.4 times, Morgan Stanley is trading at a slight discount to its sector’s current valuation, although its P/S is on the high side at 2.7. Even during 2022’s deep bear market, Morgan Stanley managed a more than 30% return on equity in its Wealth Management division. The focus on its less capital-intensive Wealth Management business rather than consumer banking has made all the difference in its earnings results. Morgan Stanley has held up better than Goldman this year, having gained 4.4% year-to-date, and it’s easy to see why. At $410.63, the average Goldman Sachs stock price target implies upside potential of 29.4%. Goldman Sachs has a Moderate Buy consensus rating based on 11 Buys, six Holds, and zero Sell ratings assigned over the last three months. Its trailing dividend yield of 3% is higher than the industry average of 2.1%. At the firm’s recent investor day, management highlighted their ongoing pivot toward the more profitable Asset and Wealth Management division.įinally, financial stocks often pay dividends, and Goldman Sachs is no different. However, Goldman’s new management is working to rectify these issues. Sources told The Financial Times that the firm lost about $200 million at its trading desk that deals with interest rate products. For example, the yield on the two-year Treasury note has been plummeting at its fastest pace since 1987 recently, which is having an outsized impact on Goldman Sachs. Goldman’s business model is also causing other problems right now. In 2022, the so-called “Platform Solutions” business, which is essentially the consumer business, made up only 3% of Goldman’s business, but it generated net losses of $1.7 billion. Unfortunately, the firm’s management has made some major missteps over the years, choosing to focus more on consumer banking and lending, which has become an even bigger issue as a recession threatens. The sector is also trading at a price-to-sales (P/S) ratio of 2.1 times versus its three-year average of 2.4 times, which is roughly what Goldman is trading at now. However, Goldman is trading at a price-to-earnings (P/E) ratio that’s below the industry average, and a transformation is underway, making a long-term bullish view seem appropriate.įirst, Goldman Sachs is trading at a P/E of about 10.3 times, while the financial sector is trading at a P/E of 16.4 times, slightly higher than the three-year average of 14 times. Those problems have had an outsized impact on Goldman versus Morgan Stanley due to its greater focus on consumer banking. The stock began sliding due to slower than anticipated growth and soft quarterly results. However, it was nowhere near its 2016 all-time high price and close to its 2011 IPO price. On its last trading day, LinkedIn finished at 195.96. Shares of Goldman Sachs are down 7.7% year-to-date amid the turmoil in the banking sector. The tech giant proposed to buy the company for 196 per share. Both firms reacted negatively to the collapses of Silicon Valley Bank and Signature Bank, but there’s more to the story. Upon closer analysis, it looks like both stocks are attractive, leaving me bullish.Ī review of the two firms’ year-to-date returns reveals that Morgan Stanley is holding up much better than Goldman Sachs, up 4.4% versus Goldman’s 7.7% decline. In this piece, I used TipRanks’ comparison tool to evaluate two big bank stocks, Goldman Sachs Group ( NYSE:GS) and Morgan Stanley ( NYSE:MS), to determine if they’re worth buying.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |