Goldman Sachs is down 23% YTD: is now the time to buy?

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Written on May 10, 2022

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Kevin Simpson makes a bull case for Goldman Sachs on CNBC's "Squawk Box".
The Wall Street at present has an average price target of $418 on the bank stock.
Shares of the American multinational are down 23% versus the start of the year.

Shares of Goldman Sachs Group Inc (NYSE: GS) down 23% for the year is an opportunity that can secure incredibly positive returns for investors over the long term, says Kevin Simpson.

Simpson’s bull case for Goldman Sachs stock

On top of attractive valuation, the founder of Capital Wealth Planning sees several other reasons to own Goldman Sachs. Speaking with CNBC’s Joe Kernen on “Squawk Box” this morning, he said:

We’re looking for opportunities, we’re not calling bottoms. Goldman Sachs pays over a 2.50 dividend and the best part of this story is that over the past five years, it has had an average dividend increase of 20%.

Last month, Goldman Sachs reported its financial results for the first quarter that handily topped Wall Street expectations. The stock now trades at a PE multiple of 6.0.

How does the Wall Street feel about Goldman Sachs?

The Wall Street rates Goldman Sachs at “overweight” at present with an average price target of $418 that represents just under 40% upside from here.

The investment bank valued its credit exposure to Russia at $650 million at the end of 2021. In March, however, Goldman Sachs trimmed it to $260 million in response to Putin’s war crimes in Ukraine.

Kevin Simpson remains “cautiously” bullish on the broader market as well and recommends that investors start looking for opportunities now that the S&P 500 index is down 16% year-to-date.