Citi sees high bar for Goldman Sachs into Q2 earnings

Citi believes Goldman Sachs (GS) is executing on all of the key initiatives laid out at its recent analyst day. The company’s recent results “seem to point to clear line of sight” on the 15%-17% return on tangible common equity target, and “there is a bull case that this range can be lifted,” the analyst tells investors in a research note. However, the firm says Goldman shares are trading well above its historical ranges. In order to make the case that it’s attractively priced here, one would need to assume an 18% plus ROTCE and a much lower risk profile, “which seems a bridge too far,” contends Citi. As such, it believes the “bar is fairly high on this name.” The firm keeps a Neutral rating on Goldman with a $550 price target as part of a Q2 earnings preview.