Keefe Bruyette & Woods analyst Lauren Smith on Tuesday cut her rating on Goldman Sachs to market perform from outperform and said the stock's recent run-up is limiting upside potential. "There is no longer enough upside to support the outperform, and we don't see catalyst for significant multiple expansion," Smith wrote in a research report. In the same note, Smith maintained an outperform rating on Goldman rival Morgan Stanley's shares, saying they had attractive upside and total potential return. "There is more than a 50% chance, in our view, that the market takes a big step back before moving higher after last week's rally. We believe that both Goldman and Morgan Stanley will remain highly volatile and will continue to provide a lot of trading opportunities but we think they are more likely to give back some of these recent gains along with the market," she concluded. http://www.marketwatch.com/news/sto...FD-EAD2-4B0F-ABD8-964068CD1B78}&dist=hplatest Somebody is caught in the short sqeeze "trap", it seems...
If GS runs at the 10% ROE it would be at 10 times earnings trading at $100. 10 multiple for MAYBE 10% ROE seems a bit high, specially given all the balance sheet/leverage/regulation risk the company carries, revenues will remain under pressure for years too. I'm short GS here and I think it needs to go to around $60-$70 on valuation alone