Current Earnings Estimates for Goldman Sachs As Weak As Ever

 |  About: Goldman Sachs Group Inc. (GS)
by: Steve Patterson

I have been holding Goldman Sachs (NYSE:GS) stock for quite some time and had been looking for a good opportunity to exit the position. Earlier this week I got the chance to sell and took the opportunity to end the trade with a small 5-6% loss. The stock had rallied up to $189 a share at the end of October 2009 but estimates began to slip and the stock steadily fell to below $150. A recent financials rally pulled Goldman Sachs from the price of $148.72 up to $177.90 a share on March 19th. During this time the fundamentals of the company did not change.

The current earnings estimates are as weak as ever for Goldman. Just this week, estimates were cut again from $4.13 a share in the current quarter down to $4.02 a share. Revenue is rising this quarter at 18% compared to the same quarter a year ago. But revenues next quarter are expected to fall 14.8% with current year revenue flat compare to 2009.

Furthermore, the Russell 2000 gave a hold signal 5 trading days ago and Goldman Sachs stock broke down through a top formation. It looks like an excellent time to sell. The stock price fell to $172.87 on March 26th to rally the next day. But it has now fallen to $170.63 a share, creating a pretty decent top formation from a technical perspective. A continued financials rally could stabilize the stock near its current level but the underlying fundamental problems should keep it from rallying with the rest of the industry.

Goldman Sachs 6 Month Chart

Goldman Sachs 6 months