Goldman Sachs (NYSE:GS) shares slipped nearly 1% to $380.40 in midday trading on Wednesday after BMO Capital analysts downgraded Goldman stock from ‘Outperform’ to ‘Market Perform’, while cutting their price target to $357 per share from $421 previously.
They noted that its stock price is due for a pullback.
“Bottom Line: Banks and specialty finance stocks appreciated by almost +40% into year-end (versus S&P 500) and now look vulnerable to an impending credit cycle (soft landing or not) and ever-higher capital requirements (from seemingly interminable regulatory pressure),” the analysts wrote.
They added that credit quality is deteriorating, and lenders will likely need to grow into new capital thresholds as proposed by US banking regulators as part of the Basel III endgame.
Shares of Goldman Sachs (NYSE:GS) have gained 7% over the past 52 weeks.