Goldman Sachs shares hit a 15.5-month high on Tuesday, bank reveals new reporting structure

Goldman Sachs Group Inc (GS) disclosed a new reporting structure, starting with the fourth quarter of 2019, under which details on its consumer business will be reported for the first time.

Goldman Sachs shares closed higher for a second consecutive trading session in New York on Tuesday. The stock went up 0.66% ($1.54) to $235.49, after touching an intraday high at $237.77, or a price level not seen since September 21st 2018 ($238.52).

Shares of Goldman Sachs Group Inc have risen 2.42% so far in 2020 compared with a 0.20% gain for the benchmark index, S&P 500 (SPX).

In 2019, Goldman Sachs Group’s stock went up 37.64%, thus, it again outperformed the S&P 500, which registered a 28.88% gain.

Goldman revealed an entirely new segment named Consumer & Wealth Management, which includes management and other fees, incentive fees and results from deposit-taking activities associated with Goldman’s wealth management business. Previously, these revenue sources were reported in Investment Management.

The new unit will also include the results from providing loans through Goldman’s private bank, providing unsecured loans and accepting deposits through its digital platform Marcus as well as providing credit cards. Previously, these results were reported in Investing & Lending.

“The new reporting structure appears more centered around its different client segments and should help drive increased accountability in how it executes on its relatively new strategy,” Barclays analyst Jason Goldberg was quoted as saying by Reuters.

“The biggest changes appears to be the elimination of ‘Investing & Lending’, an area that investors viewed as a low multiple business. Those revenue sources were divided up across its new business units,” Goldberg noted.

The bank’s other newly named divisions include: Investment Banking; Global Markets, previously named as institutional client services business; and Asset Management, previously known as Investment Management.

Analyst stock price forecast and recommendation

According to CNN Money, the 22 analysts, offering 12-month forecasts regarding Goldman Sachs’s stock price, have a median target of $250.00, with a high estimate of $341.00 and a low estimate of $175.00. The median estimate represents a 6.16% upside compared to the closing price of $235.49 on January 7th.

The same media also reported that at least 12 out of 25 surveyed investment analysts had rated Goldman Sachs’s stock as “Hold”, while 10 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

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