Goldman Sachs Joins Alibaba-backed Ant’s IPO of Up to $30 Billion Syndicate; Target Price $250

Goldman Sachs, an American multinational investment bank and financial services company headquartered in New York City, has joined syndicate for Chinese financial technology firm Ant Group IPO of up to $30 billion, two people with direct knowledge told Reuters.

Ant Group, an affiliate company of the Chinese Alibaba Group, plans to list simultaneously in Hong Kong and Shanghai, in what sources have said could be the world’s largest IPO and come happen next month, according to Reuters.

Goldman Sachs’ shares closed 1.62% to $210.94 on Friday. However, the stock is down about 8% so far this year.

Goldman Sachs stock forecast

Sixteen analysts forecast the average price in 12 months at $246.27 with a high forecast of $323.00 and a low forecast of $192.00. The average price target represents a 16.75% increase from the last price of $210.94. From those 16 analysts, ten rated “Buy”, six rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave a target price of $192 with a high of $295 under a bull-case scenario and $119 under the worst-case scenario. Goldman Sachs stock prices were raised by Citigroup to $285 from $265 and Oppenheimer lowered their target price to $323 from $355.

Other equity analysts also recently updated their stock outlook. UBS raised their stock price objective to $220 from $200, Berenberg upped their target price to $200 from $160, D.A. Davidson raised target price to $238 from $215, RBC increased their stock price forecast to $225 from $200, KBW raised price objective to $260 from $240, Evercore ISI raised target price to $235 from $230 and Credit Suisse raised price objective to $255 from $240.

Analyst views

“While GS is in the middle of a multi-year strategic shift, a majority of the business still skews to capital markets. We expect the stock remains range-bound, as capital markets-related revenues can be volatile given the elevated level of macro uncertainty,” said Betsy Graseck, equity analyst at Morgan Stanley in July.

“Stock is trading at 1.0x BVPS, reflecting the 9-10% ROE we expect in 2021/2022, driving our Equal-weight rating,” she added.

Upside and Downside risks

Upside: 1) Quick and sustained economic / capital markets rebound. 2) Strong trading environment and market share gains. 3) Strategic changes drive revenue/EPS growth sooner than expected. 4) Faster expense reduction. 5) 1MDB issue resolved quickly – highlighted Morgan Stanley.

Downside: 1) Markets decline sharply and IBD activity stalls through 2021. 2) Higher loan losses in consumer loan books. Energy prices decline further. 3) Strategic changes take longer to execute.

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