Keefe Bruyette Updates Goldman Sachs (GS) Outlook Following Conference Discussions

The Goldman Sachs Group, Inc. (NYSE:GS) is included among the 10 Cash-Rich Stocks to Buy Now.

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On December 17, Keefe Bruyette raised its price target on The Goldman Sachs Group, Inc. (NYSE:GS) to $971 from $870 and kept a Market Perform rating on the shares. The firm updated its estimates after recent conference discussions and meetings with management.

Separately, The Wall Street Journal reported on ongoing challenges at Goldman Sachs BDC, The Goldman Sachs Group, Inc. (NYSE:GS)’s business-development company that focuses on lending to middle-market firms. The value of its holdings on a per-share basis has declined for seven consecutive quarters as loan performance weakened. The stock price has fallen even more sharply. One analyst ranked Goldman BDC’s credit performance 25th out of 26 publicly traded BDCs, an unfamiliar position for a firm of Goldman’s stature.

Management changes are already in place. The company has restructured some loans by pushing out maturity dates and allowing delays in interest payments. Goldman says newer loans are performing better, and some operating metrics have improved over the past year. Analysts note that legacy loans still make up a meaningful share of the portfolio and continue to weigh on results.

Like other BDCs, Goldman Sachs BDC raises capital by issuing shares or taking on debt, then lends that capital through customized private-credit transactions. The income generated is returned to investors through dividends, which has made BDCs popular with individual investors. Goldman BDC’s assets total about $3.4 billion, a small slice of the roughly $162 billion Goldman manages across its private-credit platform.

The Goldman Sachs Group, Inc. (NYSE:GS) operates as a global investment banking and financial services firm, with businesses spanning securities, asset management, and wealth management for clients around the world.

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