Goldman Sachs is nearly half the bank it used to be
“I’m half the man I used to be,” lamented Scott Weiland of the Stone Temple Pilots in the band’s 1992 song “Creep.”
Well, in one way, Goldman Sachs is nearly half the bank it used to be. The bank is up nearly 2% midday after reporting blockbuster earnings of $14.12 for the first quarter (estimates were for $12.26). What’s more, management announced a multiyear plan to buy back up to $40 billion of its own shares.
In an interview on Bloomberg following the release of earnings, RBC analyst Gerard Cassidy flagged just how much the bank has shrunk its share count over the past 15 years.
“If you go back to the peak level of shares outstanding for Goldman Sachs, which was back in the first quarter of 2010 — so this is post financial crisis, banks had to issue equities to get through the crisis — their share count has fallen over 45% since that time,” he said. “This is one of their active strategies and they do it very well.”
Cassidy has a sector perform rating and $610 price target on the stock.
As Bloomberg TV’s Jon Ferro observed, a $40 billion buyback plan into a market cap of about $161 billion is a truly colossal figure.
