Goldman Sachs Group Inc (GS) projects a 25% drop in S&P 500 dividends this year, as it cited the vulnerability of some large dividend-paying industries to the economic shock of the coronavirus pandemic.
A wave of dividends may be suspended, reduced or scrapped over the remaining months of 2020, the Wall Street bank said.
Goldman Sachs shares closed higher for the sixth time in the past ten trading sessions in New York on Monday. The stock went up 0.81% ($1.28) to $159.62, after touching an intraday low at $153.36, or a price level not seen since March 25th ($145.42).
Shares of Goldman Sachs Group Inc have retreated 30.58% so far in 2020 compared with an 18.70% loss for the benchmark index, S&P 500 (SPX).
In 2019, Goldman Sachs Group’s stock went up 37.64%, thus, it outperformed the S&P 500, which registered a 28.88% gain.
“The record high level of net leverage for the median S&P 500 stock coupled with the ongoing credit market stress means many firms are unlikely to borrow to fund their dividend,” Goldman Sachs pointed out in an investor note, cited by Reuters.
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 $246.25, with a high estimate of $367.00 and a low estimate of $154.00. The median estimate represents a 54.27% upside compared to the closing price of $159.62 on March 30th.
The same media also reported that at least 13 out of 25 surveyed investment analysts had rated Goldman Sachs’s stock as “Buy”, while 10 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.