[ad_1]
Goldman Sachs Group Inc. Chief Executive David Solomon should stay in the job despite recent criticism and even as the bank’s stock performance has lagged its peers, Odeon Capital analyst Dick Bove said on Friday.
“I do not think he should be removed,” said Bove as he reiterated a buy rating on Goldman Sachs. “I am hopeful that the company will continue the initiatives he has been pursuing over the past five years.”
Goldman Sachs’s stock
GS,
fell 0.6% on Friday.
Bove, who has been covering Wall Street banks for decades, took a long view of the personnel changes made by Solomon and the complaints about his abrupt management style.
“Recently, the press has been publishing one article after another indicating that there is turmoil at Goldman Sachs and that several key people would like to see David Solomon removed as CEO,” Bove said. “While the employees Solomon let go may not have liked being fired and denigrated, it is not clear that Mr. Solomon should be castigated for what he did.”
Also read: Goldman CEO David Solomon faces criticism at bank amid struggles: report
Also read: Goldman woos veteran Russell Horwitz to return as chief of staff, while two other executives depart
Goldman has made plenty of missteps, such as a push into retail banking that resulted in billions of dollars in losses and the pending sale of its GreenSky consumer unit, he said.
Goldman Sachs put too much money into the consumer push, and it should have seen that “a company entering an established sector against well-run competition must lose a great deal of money before it buys an acceptable share,” Bove said.
Looking ahead, the outlook for investment banking is improving, and with it, the prospects may grow brighter for Goldman’s core businesses of trading, wealth management and loans, he said.
Bove also said it’s not unusual for Wall Street bank chiefs to lay people off and reshuffle management, and he noted that other bank executives have mostly escaped criticism for doing those things.
Goldman Sachs’s stock is down 5.1% in 2023, compared with a 10.4% rise by JPMorgan Chase & Co.
JPM,
a year-to-date gain of 0.8% by Morgan Stanley
MS,
a 12.4% drop by Bank of America Corp.
BAC,
a 2.6% rise by Wells Fargo & Co.
WFC,
and a 6.2% decline by Citigroup Inc.
C,
Also read: JPMorgan, Goldman and Morgan Stanley win praise in Jefferies Q2 bank earnings wrap
[ad_2]
Source link
