Stay Away From Goldman Sachs Group, Inc. (GS) Despite Earnings Beat

Competition

Among Goldman Sachs Group, Inc. (NYSE:GS)’ peers, JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C) and Wells Fargo & Co (NYSE:WFC) have already reported their performances for the first quarter of the current year. Most of these peers were able to beat analysts’ mean estimates, while only Citigroup was able exceed both its top (+3.2%) and bottom line estimates. JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C) and Wells Fargo & Co (NYSE:WFC) posted 14.4%, 10.3% and 4.5% earnings beats, respectively. Among other trends seen in the US banking sector are decreasing operating expenses followed by pressure on the top lines, coupled with compressing net interest margins.

Given the slowdown in Goldman Sachs Group, Inc. (NYSE:GS)’ trading revenues you can expect a similar trend in Morgan Stanley (NYSE:MS)’s latest disclosures today.

Conclusion

While the environment remains challenging for US banks to grow their top lines, they have done a good job expanding bottom lines, while concentrating on expense management. However, at Goldman Sachs Group, Inc. (NYSE:GS), the situation is a bit different. Despite the earnings beat, analysts and investors are more concerned about the slowdown in the bank’s trading revenues. Owing to this concern, I recommend investors stay away from Goldman Sachs.

The article Stay Away From Goldman Sachs Despite Earnings Beat originally appeared on Fool.com and is written by Adnan Khan.

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