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6 pts

Opinion on  Goldman Sachs Group Inc The (GS)     Sector: Financial  >  Industry: Investment Services
Goldman Undervalued

Aug 19, 2008 01:43 AM UTC
Return Risk
-10.94% MID
Associate

Goldman Sachs is undervalued, dragged down by the rest of the industry, rumor and analyst sentiment that has turned against this investment bank that used to be perceived as the best of the best.  Well, here are the strict valuation metrics.  Goldman has a projected PE of only 8.4x compared to the industry's (Investment Brokerage) 14.8x implying a projected stock price of $280.  The PEG story is even more severe with GS having a 0.65 PEG and the industry having a PEG of 2.20...giving a projected stock price that is even higher.  Does Goldman deserve to trade below the industry average?  I don't think so and I would not bet against them.  Here is the analysis:

http://www.freestockvalueranker.com/?method=peg_pe&symbol...


GS:  This call was made on 08/19/08 @ $158.49001
Rating:   Positive   $158.49001 (08/19/08)
Gain/Loss:   -67.75% in 93 days
Target:   $250.00 (+57.74%) in Three months


Comments (2)

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styex   77%     1 point   commented 92 days ago reply

Although I am sure most of you data may be correct, never base you decision based on anything with the title "free" in it. There are thousands of analyst doing "Paid" valuation on GS and based on that we get the value GS is at now.

1 Also most of stock price can be explained by two things:
Fear and lies in the finacial sector, right now no candidate can be trusted.

2 Slowing of potential growth. The credit market is frozen and with that so are the potential growth and income for Ibanks.
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energycurve   69%     1 point   commented 91 days ago reply

Thank you for your comments. Your points are well taken, however, the fact is that as growth rates get projected down by the analysts and as earnings projections drop, so should the average projected PE and should drop but the PEG should rise for the industry. This process should already be occurring because this free stock ranker is automatically updating projected PE's and PEG's of not only Goldman, but the whole investment brokerage industry. Goldman's stock price is not high enough to enable it to trade at industry projected PE and PEG...so it's undervalued. It's just strictly by the numbers in the market.

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