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Goldman Sachs shares close higher on Monday, bank could earn $100 million from Texas deep freeze, Bloomberg reports

According to a recent report by Bloomberg News, Goldman Sachs Group Inc (GS) could generate nearly $100 million in earnings from February’s winter storm, which left many households across Texas and some other southern states without electricity, heat and clean water.

The media also said that Goldman’s earnings from the physical sale of power and natural gas, as well as from financial hedges after spot prices rose, could exceed $200 million on paper.

Goldman Sachs shares closed higher for the sixth time in the past ten trading sessions in New York on Monday. It has also been the sharpest single-session gain since March 1st. The stock went up 2.08% ($6.82) to $334.19, after touching an intraday high at $337.59, or a price level not seen since March 4th ($339.69).

Shares of Goldman Sachs Group Inc have risen 26.73% so far in 2021 compared with a 1.74% gain for the benchmark index, S&P 500 (SPX).

In 2020, Goldman Sachs Group’s stock went up 14.69%, thus, it underperformed the S&P 500, which registered a 16.26% gain.

The severe cold front in Texas in mid-February triggered extreme volatility in the local energy market, as it reduced supplies while the cost of emergency fuel and power skyrocketed.

“The polar vortex drove volatility in energy markets, and, as a market-maker and liquidity provider, we were positioned to help our clients manage their risks in that challenging environment,” a spokesperson for Goldman Sachs said in an emailed statement, cited by Reuters.

Analyst stock price forecast and recommendation

According to CNN Money, the 25 analysts, offering 12-month forecasts regarding Goldman Sachs’s stock price, have a median target of $345.00, with a high estimate of $449.00 and a low estimate of $270.00. The median estimate represents a 3.23% upside compared to the closing price of $334.19 on March 8th.

The same media also reported that at least 17 out of 27 surveyed investment analysts had rated Goldman Sachs’s stock as “Buy”, while 7 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

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