(Recasts; adds details, background) June 18 (Reuters) - Wall Street analysts raised their fiscal 2008 earnings estimates for Goldman Sachs Group Inc (GS.N) on Wednesday, a day after the investment bank posted second-quarter results that exceeded expectations.
“The company’s challenge at this point is to re-stimulate trading while holding on to its investment gains. The second quarter results do not appear to be sustainable,” Ladenburg Thalmann analyst Richard Bove wrote in a note to clients.
On Tuesday, Goldman Sachs said second-quarter revenue from fixed-income trading, normally its largest business, fell 29 percent to $2.38 billion.
Bove, who rates the stock “sell,” raised his fiscal 2008 earnings estimate for the company to $15.45 from $13.96 per share.
Oppenheimer & Co analyst Meredith Whitney, who has a “perform” rating on the stock, raised her 2008 earnings view to $15.75 a share from $14.65.
“Although Goldman continues to outperform its peers, as reflected with its higher multiple, we remain cautious on the brokers group as the capital markets activity remain anemic and believe Goldman is fairly priced at these levels,” Whitney said.
Wachovia raised its 2008 earnings estimates to $18.21 from $17.80 a share, while Lehman raised it to $16.81 from $15.04 a share.
On Tuesday, Goldman Sachs reported an 11 percent fall in quarterly earnings as market turmoil hit trading and slowed investment banking, yet the firm again exceeded expectations by avoiding major losses on assets slammed by the credit crisis. (Reporting by Supantha Mukherjee in Bangalore; Editing by Deepak Kannan)