Goldman Sachs Group, Inc. (GS) is surging on higher estimates, with the company’s share price building on its already impressive gains from the last 7 months.

Company Description

Goldman Sachs in an investment bank that specializes in providing investment services like investment banking and money management. The company was founded in 1869 and has a market cap of $74 billion.

First-Quarter Results

Goldman’s share price has been in rally mode for most of the last 7 months after bottoming out last November during the height of the financial crisis. The company’s much better than expected first quarter results, reported on May 15, have given shares an extra boost.

Revenue was down from last year, coming in at $11.88 billion. Income however was actually up from last year, improving to $3.39 per share, far ahead of the consensus of $1.64.

Spreads Drive Trading Results

Goldman’s results were helped by excellent results from its credit trading division, which benefited from unusually large spreads due to the market volatility.

Estimates Surge

With renewed optimism running through the economy and the financial sector, analyst have become very bullish on Goldman. The next-year estimate is surging, jumping to $11.51 per share from just $7.72 60 days ago. The next-year estimate is pegged at $13.11, a 14% earnings growth projection.

Valuations

In spite of the big run-up in the company’s share price, it still looks reasonably valued due to higher estimates. Based upon the current-year estimate, this stock has a P/E multiple of just over 12X, in line with the overall market.

The Chart

As previously mentioned, shares of GS have been locked into a nice rally for the last 7 months, having received a nice boost in the last 3 months from a stronger overall market. Take a look at the nice run below.

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