We are initiating coverage on Goldman Sachs (GS) with an Outperform recommendation. The company reported strong second-quarter results, significantly ahead of the Zacks Consensus Estimate, led by strong topline growth in all its key businesses.
Goldman’s well-diversified business model, coupled with a more favorable operating environment resulting from improved equity markets, led to strong growth in fixed income and a turnaround in investment banking activity.
Though losses from the commercial real estate portfolio will likely weigh on the results in the near term, we think Goldman’s sturdy capital and liquidity will lead to increased profitability from newer opportunities once the economy recovers.Zacks Investment Research
