Investors should buy Goldman Sachs stock as rising interest rates and rebounding revenue put the bank in the “early innings” of a new growth story, according to Bernstein.
Investment banking, management and lending have overtaken trading as the firm’s leading source of revenue, wrote analyst Christian Bolu, who initiated Goldman coverage at outperform.
“We believe the revenue recession that has plagued Goldman Sachs shares is at an inflection point,” Bolu told clients on Monday. “We see in the current cycle many of the ingredients (rising rates, benign credit conditions and deregulation) that drove institutional brokerage stocks to significantly outperform during the 2003 – 2006 cycle.”
