Thursday, May 12, 2011

Goldman Sachs (GS) Richard X. Bove

Sell 813.909.1111
rbove@rochdalesecurities.com
SYM/EXCH Current Previous Highlights
Rating Sell Neutral
Target Price $120.00 $163.00 The rating on Goldman Sachs stock is being lowered to Sell from
Normalized Earnings $21.30 $21.30 Neutral. The price target is being cut to $120 per share from
Stock Data (03/11) $163 per$00.00
share.
Current Price $147.88
It now appears that the pressure on the Justice Department to
52 Week Low/High $129.50 $175.34
Est. 2011 Rev Per Share/P:RPS $73.85 2.00x bring a criminal lawsuit against Goldman is building to a high
Est. 2011 EPS/PE $13.66 10.8x pitch. The new Matt Taibbi article in Rolling Stone Magazine is
Book Value/Price:Book $118.99 1.24x another all-out attack on the company. However, this time the
Tangible BV/Price:TBV $110.00 1.34x
attack is backed by a 650 page Senate report signed by both a
Dividend/Yield $1.40 1.0%
Shares Out/Mkt. Cap (mil) 583 $86,214 Democrat and a Republican.
Income Statement (mil)/ Percent of Revenue (03/11) It is clear00.0%
to outsiders that there must be a major restructuring of
Investment Banking $1,269 10.7% the company at the Board and executive suite levels or Congress
Principal Transactions $2,612 22.0%
will not be satisfied. The company continues to fight such a
Market Making $4,462 37.5%
Commissions & Fees $1,019 8.6% change.
Investment Management $1,174 9.9% Thus, the best investors can hope for is continued in-fighting
Net Interest Income $1,358 11.4%
Operating Revenues $11,894 100.0%
between the government and the company. This does not work
Personnel Costs $5,233 44.0% for shareholders.
All Other Expenses $2,621 22.0%
It is likely that the stock will slip to a price near book value while
Pretax Income $4,040 34.0%
this conflict unfolds. As was pointed out to me should this stock
00.0%
Balance Sheet (mil)/Percent of Assets (03/11)
Cash $42,683 4.6%
rise in price, the government will renew its efforts to bring the
Segregated cash & securities $53,512 5.7% company down.
Fed Funds & Repos $162,094 17.4% This is not a good investment. The stock should be sold. When
Securities Borrowed $184,217 19.7%
Receivables $87,619 9.4% the government/company conflict is resolved, then one can
Trading assets $374,806 40.2% review what the structure of Goldman is and rethink re-
Other $28,358 3.1% instituting positions.
Assets $933,289 100.0%
Short-Term Debt $53,746 5.8%
Deposits $38,727 4.1% Note: The tables in this report have been prepared by Rochdale Securities from sources believed
Trading $150,998 16.2% to be accurate. However, accuracy cannot be guaranteed.
Repos $165,475 17.7%
Other Securities $49,136 5.3%
Payables $193,396 20.7%
Other Liabilities $35,549 3.8%
Long Term Debt $173,793 18.6%
Preferred Stock $3,100 0.3%
Common Equity $69,369 7.4%
Est. Tangible Common Equity $64,131 6.9%
Key Ratios (03/11)
3-Year RPS CAGR (11.4%) 2010 2011 2012 2013
3-Year EPS CAGR (19.4%) Mar $5.59 $1.56 $4.49 $4.90
Tier One Common 12.8% Jun $0.78 $4.02 $4.64 $5.04
Return on Equity 15.8% Sep $2.98 $3.87 $4.39 $4.95
Return on Assets 0.29% Dec $3.79 $4.21 $4.55 $5.11
Year $13.18 $13.66 $18.07 $19.99

Previous $13.18 $13.66 $18.07 $19.99

Consensus $13.18 $14.87 $19.16 $21.41

Source: Trade Station

P/E Multiple 11.2x 10.8x 8.2x 7.4x

© 2011 Rochdale Securities LLC. All rights reserved. PLEASE SEE IMPORTANT DISCLOSURE AND ANALYST CERTIFICATION LOCATED AT THE END OF THIS REPORT.
 Thursday, May 12, 2011

Rochdale Securities LLC

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Management Trading

Dan Crowley Kevin Cassidy Kris Talgo Hal Tunick

President Senior Vice President Senior Vice President Senior Vice President
djc@rochdalesecurities.com Chief Operating Officer Trading Co-Head Trading Co-Head
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Financial Analyst Merger Arbitrage and Special Situations

Richard X. Bove Barry D. Kaplan

Vice President Equity Research Merger Arbitrage and Special Situations
Financial Sector bdk@rochdalesecurities.com
rbove@rochdalesecurities.com 203.274.9121
813.909.1111

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 Thursday, May 12, 2011
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RR RATINGS DISTRIBUTION
RATINGS FOR STOCKS
BUY 23
HOLD 48 Buy Company has demonstrated that it is a value creating concern; the
SELL 29 return on capital (as adjusted) exceeds its cost of capital. Stock is
currently trading in a range that does not exceed its intrinsic value. Stock
ANALYST CERTIFICATION is expected to out-perform the market over the next twelve months.

I do not hold any securities of the company covered by this report.
I certify that with respect to each security or issuer that I covered in this
report; (1) all of the views expressed accurately reflect my personal views
about those securities or issuers; and (2) no part of my compensation was,
is, or will be, directly or indirectly, related to the specific recommendations
or views expressed by me in this research report.
-- Richard X. Bove
Hold/Neutral Company either is not creating value (i.e., its costs exceeds
its return on capital) or it is trading at a price equal to or in excess of its
intrinsic value. Expectation is at best stock will perform in-line with market.
If not currently held, stock should be avoided.
Sell Company's cost of capital exceeds its return on capital; and the
company has no intrinsic value or is trading at a significant premium to its
intrinsic value. Expect stock to under-perform the market over next twelve
months.

HISTORICAL RATINGS
PRICE TARGET
$250.00

$200.00

$150.00

$100.00

$50.00

$0.00
03/24/2009

04/13/2009
04/13/2009
04/14/2009

06/02/2009
06/30/2009
07/07/2009
07/14/2009
07/28/2009
08/05/2009
08/19/2009
09/26/2009
10/15/2009

11/11/2009

12/15/2009
12/21/2009
01/26/2010
02/05/2010
02/10/2010
03/02/2010
03/04/2010
03/30/2010
04/07/2010
04/16/2010
04/20/2010
04/24/2010
05/02/2010

05/19/2010
06/04/2010
06/23/2010
07/18/2010
07/20/2010
07/29/2010
08/04/2010
08/20/2010
09/04/2010
09/08/2010
09/21/2010
09/22/2010
10/19/2010

12/20/2010
01/11/2011

03/01/2010

05/11/2011
04/11/2009

05/11/2009

11/03/2009

11/16/2009
11/27/2009

05/11/2010

11/15/2010
11/16/2010

01/18/2011
01/19/2011
02/09/2011

03/16/2011
03/18/2011
03/25/2011
04/14/2011
04/19/2011

05/12/2011

DATE

RATING N N N N B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B N N S

© 2011 Rochdale Securities LLC. All rights reserved. PLEASE SEE IMPORTANT DISCLOSURE AND ANALYST CERTIFICATION LOCATED AT THE END OF THIS REPORT.