January 18, 2012

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Not Glittering
Goldman Sachs (GS,$GS) Tightens Belt, Beats Estimates, Still Rated a Sell
Goldman Sachs is a global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a substantial and diversified client base, which includes corporations, financial institutions, governments, and high net worth individuals. Wall Street giant Goldman Sachs posted Q4 revenues which declined by 30% but earnings just managed to beat estimates thanks to the firm's various "austerity" measures. Bonuses were lower and the company lost 2400 employees worldwide. The company reports that it managed to cut $1.4 billion in expenses in 2011. The stock lost more than 40% over the past year as the bank continues to deal with the financial crisis and the weak global economy. The model is bullish for the short-term-forecasting an increase of 4.46%--but bearish for the longer-term time horizons--with the shares predicted to decline 8% at one year and even more at the two and threeyear points. ValuEngine has issued a SELL recommendation for GOLDMAN SACHS on Jan. 18, 2012. Based on the information we have gathered and our resulting research, we feel that GOLDMAN SACHS has the probability to UNDERPERFORM average market performance for the next year. The company exhibits UNATTRACTIVE momentum, risk and 5-year annualized return.

Based on available data as of Jan. 18, 2012, we believe that GS should be trading at $143.59. This makes GS 31.97% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For GS, we base this on actual earnings per share (EPS) for the previous four quarters of $4.82, forecasted EPS for the next four quarters of $13.85, and correlations to the 30-year Treasury bond yield of 2.89%.
ValuEngine Forecast Target Price*
1-Month 3-Month 6-Month 1-Year 2-Year 3-Year 102.04 99.95 96.11 89.01 76.34 63.39

Expected Return
4.46% 2.33% -1.60% -8.87% -21.84% -35.11%

Valuation & Rankings

Valuation 1-M Forecast Return 12-M Return Sharpe Ratio 5-Y Avg Annual Return Volatility Expected EPS Growth Market Cap (billions) Trailing P/E Ratio Forward P/E Ratio PEG Ratio Price/Sales Market/Book Beta Alpha 31.97% undervalued 4.46% -43.53% -0.4 -15.51% 38.51% 187.36% 49.41 20.27 7.05 0.11 1.49 0.7 1.39 -0.44 Valuation Rank 1-M Forecast Return Rank Momentum Rank Sharpe Ratio Rank 5-Y Avg Annual Rtn Rank Volatility Rank EPS Growth Rank Size Rank Trailing P/E Rank Forward P/E Ratio Rank PEG Ratio Rank Price/Sales Rank Market/Book Rank Beta Rank Alpha Rank 79 12 21 27 37 65 92 99 48 90 97 44 79 35 21

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MARKET OVERVIEW
Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 73.94% 26.06% 36.33% 7.30%

SECTOR OVERVIEW
Sector
Aerospace Auto-Tires-Trucks Basic Materials Business Services Computer and Technology Construction Consumer Discretionary Consumer Staples Finance Industrial Products Medical Multi-Sector Conglomerates Oils-Energy Retail-Wholesale Transportation Utilities

Change
0.36% 0.41% 0.70% 0.52% 0.38% -0.30% -0.02% 0.09% 0.14% 0.92% 0.10% 0.83% 0.72% 0.21% -0.19% 0.49%

MTD
1.06% 5.77% 3.58% 2.25% 3.73% 4.83% 2.02% 2.16% 1.67% 4.79% 1.76% 3.13% 1.75% 1.02% 2.54% -1.04%

YTD
1.06% 5.77% 3.58% 2.25% 3.73% 4.83% 2.02% 2.16% 1.67% 4.79% 1.76% 3.13% 1.75% 1.02% 2.54% -1.04%

Valuation
12.30% undervalued 16.01% undervalued 13.58% undervalued 13.18% undervalued 14.52% undervalued 13.83% undervalued 14.53% undervalued 11.15% undervalued 12.16% undervalued 11.47% undervalued 17.89% undervalued 10.74% undervalued 14.22% undervalued 5.54% undervalued 10.79% undervalued 4.33% undervalued

Last 12MReturn
-14.41% -8.26% -22.83% 3.63% -7.82% -19.40% -6.33% -3.26% -7.31% -8.86% -4.52% 1.39% -15.52% 1.48% -19.07% -1.25%

P/E Ratio
16.24 14.55 22.69 29.64 43.71 39.06 27.6 18.07 20.19 24.2 34.93 14.47 38.16 23.15 20.26 28.68