Banc of America/Merrill Lynch analyst Guy Moszkowski is a Goldman Sachs fan, if his latest missive on the former investment bank is any indication.
According to Bloomberg, Moszkowski believes Goldman ” is on track to beat its 2007 trading-revenue record, enabling it to boost compensation by an estimated 64 percent from last year”:
Goldman Sachs has “unmatched risk-taking/risk-management skills in a market that strongly rewards these because of decline in competitor risk appetite,” Moszkowski wrote in a note to investors today. The New York-based firm “appears on track to accrue significantly more comp than ‘08, despite little change in headcount.”
Moszkowski said the firm will set aside 44.2 percent of total revenue to pay compensation and benefits, letting it pay workers $17.92 billion compared with $10.9 billion last year. Goldman Sachs had 27,898 employees at the end of March. If that number remains unchanged and Moszkowski’s compensation estimate is correct, it would mean an average of $642,447 per employee.
Moszkowski raised his recommendation on Goldman to “buy” from “neutral”, increased his earnings to $3.90 a share from $2.92 and also raised his price target on Goldman shares to $175 from $144.