June 25 (Reuters) - Goldman Sachs Group Inc (GS.N) could start a “large” share buyback program in 2010, said a Citigroup analyst, who increased his second-quarter earnings forecast for the company.
Analyst Keith Horowitz expects Goldman’s Tier 1 capital ratio to be at 13 percent as on June 30, and said that even if Goldman managed a Tier 1 capital ratio of between 10 percent and 11 percent, it would still be left with close to $11 billion in excess capital.
“With this significant excess capital position, we would expect Goldman Sachs to start a buyback program in the next couple quarters, which could be a potential catalyst for the stock,” Horowitz said in a note to clients.
The analyst raised his second-quarter earnings estimate for the company to $3.90 from $3.35 as he expects higher revenue from Goldman’s core fixed income, currency and commodities (FICC) segment, strong equity underwriting volumes and increased principal investment revenue.
His forecast includes an estimated charge of 77 cents a share related to the repayment of funds borrowed under the Troubled Asset Relief Program.
Horowitz maintained a “buy” rating and a target price of $160 on the company’s stock.
Goldman’s shares were up 41 cents at $143.06 in Thursday morning trade on the New York Stock Exchange. (Reporting by Brenton Cordeiro in Bangalore; Editing by Anne Pallivathuckal)