Banking & Finance

Goldman Sachs Indicating Lower After Earnings

Goldman Sachs (GS) posted earnings this morning at $6.59 on a diluted basis, but the number before items is a tad higher at $6.77 EPS,  The street was looking for $6.00 to $6.10, but recent strength in the markets and a slew of positive research calls in the sector put the “whisper number” up between $6.50 and $7.00 on EPS.

Brokerage firms are expected to always exceed earnings estimates, so this is actually par for the course. GS shares are trading marginally lower by 1.25% down to $200.00 in pre-market activity.  The 52-week trading band is $124.23 to $206.70, so you can see the company has been doing more than well in 2006.

Just yesterday Cramer noted that the company’s stock was ahead of itself.  GS now has an $86 Billion market cap.  Based on the full 2006 number just reported (at $19.69 EPS), the company has a trailing P/E ratio of $10.15.  The street is expecting roughly $18.00 per share in earnings for 2007 as of last week, so it looks like there will probably be some estimate hikes in the coming days after we see the rest of the brokerage firm EPS reports.

Jon C. Ogg
December 11, 2006

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