Goldman Sachs (GS) stock closed higher Monday after the investment banking giant beat expectations on the top- and bottom-lines for its second quarter and reiterated news of its quarterly dividend hike.
In the second quarter ended June 30, Goldman's net revenue increased 17% year-over-year to $12.7 billion, driven by a 27% rise in its Asset & Wealth Management segment to $3.9 billion. Its earnings per share (EPS) jumped to $8.62 from $3.08 the year-ago period.
"We are pleased with our solid second quarter results and our overall performance in the first half of the year, reflecting strong year-on-year growth in both Global Banking & Markets and Asset & Wealth Management,” Goldman Sachs CEO David Solomon said in a statement. “Our One Goldman Sachs operating approach is allowing us to bring the whole firm to our clients, deepening our relationships and serving them in an improving, but complex environment."
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The results handily beat analysts' expectations. Wall Street was anticipating revenue of $12.5 billion and earnings of $8.34 per share, according to CNBC.
Goldman also increased its quarterly dividend by 9.1% to $3.00 per share, which it first indicated it would do on June 28 following the release of the Federal Reserve's stress test results. The first dividend at this increased rate will come on September 27 to shareholders of record on August 30.
Is Goldman Sachs stock a buy, sell or hold?
Goldman Sachs is one of the best Dow Jones stocks this year, up more than 26% on a total return basis (price change plus dividends). Unsurprisingly, Wall Street is bullish toward the financial stock. According to S&P Global Market Intelligence, the consensus recommendation among analysts it tracks is a Buy.
However, analysts' price targets have struggled to keep up with the stock's run higher. Currently, the average price target is $469.86, representing a discount of nearly 5% to current levels.
Financial services firm BofA Global Research is one of the more bullish outfits on GS stock with a Buy rating and $563 price target, citing its longer-term earnings-per-share expectations.
BofA's $563 price target represents implied upside of more than 14% to current levels.
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