Many Wall Street analysts and investors see Goldman Sachs Inc as undervalued compared to its Wall Street peers like Morgan Stanley, JPMorgan Chase, Bank of America and Citigroup, according to traditional valuation metrics like Price/Earnings, Price/Sales, Price/Book ratio.
The difference is especially stark with Morgan Stanley Inc, which is the closest think to investment bank currently, in terms of revenue distribution at least and thus directly more comparable to Goldman Sachs Inc.
In my personal opinion the huge 1MDB scandal is the main reason why investors seem to distrust Goldman.
What is more, if you check out Goldman Sachs Inc's internet site, in its executive directors list, revenue producers are hardly seen.
Some analysts think Goldnman Sachs is resting on its old laurels.
I think Goldman Sachs should become a more aggressive risk taker in its investment banking business, drive even more into the direction of private equity, equity underwriting, Mergers and Acquisitions which are all traditional strengths of the Goldman Sachs' franchise.
New avenue of growth could possibly be private banking, I think. Goldman Sachs has always targeted more actively corporations and institutional investors.
Now that Credit Suisse is undergoing a major crisis and UBS is far from its traditional strength, private banking could make Goldman Sachs' capitalisation quickly grow and start catching up with Morgan Stanley's.
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