Citi Research raised its rating for Goldman Sachs shares to neutral from sell, saying the bank’s first-quarter poor trading results were likely an anomaly.
Goldman’s stock traded down 5 percent Tuesday after the firm reported a weak March quarter. The bank missed Wall Street expectations on both sales and earnings. It surprised investors as the company has beaten profit estimates 90 percent of the time historically, according to Bespoke Investment Group.
“While 1Q fixed income trading results were disappointing, we believe it would be a mistake for investors to extrapolate these results,” analyst Keith Horowitz wrote in a note to clients Wednesday. “Goldman’s relative valuation within the group is more appropriate now than it was when we believe investors were not appropriately discounting the inherent volatility in trading results.”
Horowitz reaffirmed his Goldman price target of $225, representing 4 percent upside from Tuesday’s close.