Reports emerged that financial titan Goldman Sachs (GS), with some help from Bank of America (BAC), is getting together a new plan for a debt-swap deal with Ecuador. The move is leaving shareholders skeptical, however, and Goldman Sachs shares were down modestly in Friday afternoon’s trading.
Currently, the duo is working to give Ecuador a bit of a lifeline in terms of managing its debt in exchange for a pledge that will see part of the Amazon rainforest protected. Once the deal is prepared, Goldman will take it to investors and already has some support from the non-governmental organization, The Nature Conservancy.
The deal itself is being referred to as a “debt-for-nature” swap, in which current debt is refinanced by offering a new bond at better terms to the borrower, Ecuador, in exchange for a portion of the savings involved getting routed toward conservation causes. The new bonds also come with certain guarantees, which makes them somewhat safer and, thus, a little more appealing to potential investors.
Won’t Somebody Please Think of the Bankers?
Meanwhile, Goldman is also facing a different problem: one with its employees. It recently laid off “hundreds” of bankers, noted a report in Fortune, and that could pose a problem down the line. The report noted that those hundreds of laid-off bankers are facing disastrous times trying to get new jobs.
With 1.36 million banking jobs in America—and that number representing 33,000 fewer than this time in 2023—that means the let-go bankers will have that much harder of a time finding new work. They will likely have to pivot into something else, and that pivot may mean that skills will disappear from the job market. The disappearance of skills, in turn, will leave Goldman that much harder-pressed to find future talent should the need arise going forward.
Is GS Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GS stock based on 13 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 53.63% rally in its share price over the past year, the average GS price target of $531.19 per share implies 10.63% upside potential.
