NEW YORK (AP) -- Goldman Sachs Group Inc. shares are likely to give back some of their recent price gains, Keefe, Bruyette & Woods analyst Lauren Smith said Tuesday as she cut her rating on investment firm to "Market Perform" from "Outperform."
Smith noted that the stock rose more than 30 percent last week, benefiting from a massive, broad market rally. However, it's likely that the shares will retract from current levels along with the market, she said.
"There is more than a 50 percent chance, in our view, that the market takes a big step back before moving higher after last week's rally," Smith wrote in a note to clients. "We believe that both Goldman Sachs and Morgan Stanley will remain volatile and will continue to provide a lot of trading opportunities but we think they are more likely to give back some of these recent gains along with the market."
Smith also trimmed her price target on the Goldman shares by $7 to $101. Her 2009 profit estimate went from $8.95 per share to $6.60 per share. Analysts polled by Thomson Reuters, on average, expect earnings of $8.16 per share.
However, Smith raised her target price on Morgan Stanley by $4 to $28, and increased her full-year profit estimate to $2.25 per share from $2.10 per share.
Goldman Sachs shares slipped 9 cents to $93.81 in morning trading. Morgan Stanley shares fell 60 cents, or 2.6 percent, to $22.44
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