Goldman Sachs Group Inc.'s fourth-quarter earnings-per-share estimate was raised 15% by Sanford C. Bernstein & Co. analyst Brad Hintz, who said he expects the firm to reduce its compensation expense.
Hintz, who has an "outperform" rating on Goldman Sachs, said he expects the firm to earn $5.86 per share in the fourth quarter, up from his earlier estimate of $5.11, according to a note to investors Monday.
He predicts the firm will reduce its ratio of compensation to revenue to 36% in the fourth quarter from 47% year-to-date.
"While fixed-income faces a seasonal slowdown and investment banking has not yet recovered to allow a seamless handoff of revenue sources, we believe that fourth-quarter performance will be well supported by lower compensation accruals," he wrote.
Hintz is expecting Goldman Sachs to report $10.98 billion in fourth-quarter net revenue and $3.5 billion in compensation expense for the quarter.