NY Daily Record Since 1908
NEW YORK CITY — Wall Street analysts maintained positive views Monday on Goldman Sachs Group Inc., even though the investment bank’s shares continued to take a hit because it faces civil fraud charges.
Goldman Sachs shares fell $1.67, or 1 percent, to $159.03 in Monday afternoon trading. The modest retreat comes after shares tumbled $23.57, or 12.8 percent, to close at $160.70 on Friday.
The SEC filed civil charges Friday against Goldman Sachs, claiming the New York bank misled investors about the risks surrounding securities backed by subprime mortgages that it managed.
Those types of securities have been blamed for helping push the country into recession and creating the credit crisis.
Britain’s Prime Minister Gordon Brown called on regulators there to investigate the bank as well to determine if it misled investors in Great Britain.
Fitch Ratings said the charges and ongoing investigations would not affect the bank’s long-term credit default rating. Goldman Sachs currently carries an investment-grade “A+” rating from Fitch.
Despite the charges and more potential investigations, FBR Capital Markets analyst Steve Stelmach maintained an “Outperform” rating on the stock with a price target of $190. He did however, remove Goldman from the “FBR Top Picks” list because the charges could potentially alter banking regulations.
Uncertainty surrounding possible new financial regulation legislation could limit a rise in Goldman and other financial companies’ stock prices, Stelmach said in a note to investors.
Goldman’s shares, in particular, will face pressure because of headlines surrounding the charges and because the SEC case could alter financial regulatory reform legislation currently being discussed by Congress.
Analysts say the timing of the Goldman Sachs charges could give Congress a chance to add more oversight to the banking sector.
