[Photo: Fortune.com]

So, let me get this straight. Tuesday, Goldman Sachs reports earnings and sales for the quarter that easily beat Wall Street expectations, and then its stock got clobbered, falling 2.6%. Geez, talk about the age-old adage on Wall Street - “Buy on the rumor (expectation), sell on the news.”

Well, that’s not where it ends. In a “take no prisoners” critique, well-regarded Rafferty Capital Markets analyst Dick Bove called for the ouster of chief executive Lloyd Blankfein, who’s held the reins at Goldman since 2006.

"How many companies keep a CEO around for that long when there's been a classic mistake in the business model which has resulted in a loss of market share and no increase in earnings and no increase in the stock price? There's something wrong with the structure."

Mr. Bove and many others on Wall Street were looking at Goldman’s 17% drop in trading, that included a 40% decline in the fixed income, commodities and currencies business – typically a “bread and butter” staple at the firm.

It was back in April, when Goldman issued Q1 earnings, that Dick Bove downgraded Goldman from Buy to Hold. He also slashed his share price target from $288 to $221. Given that Goldman shares closed yesterday at $223.31, the stock would appear to be fairly priced. And, for the record, while Bove is not planning any further downgrades, he still believes the bank needs "a shakeup."

"The stock price ... is right where it was 10 years ago. The company's desire to wait for recovery in its core business and therefore make no major changes has been a critical error. I quite frankly simply don't understand how they're getting away with it."

 

"Their reputation remains extremely high. They have extremely qualified people," Bove said Tuesday. "But the level of inertia in that company is staggering relative to anyone else in the financial services industry."

[Note: Goldman's share price actually is up about 30% since 10 years ago to the day, to be precise, but has flatlined since peaking shortly after, in September 2007 – that, according to CNBC.com.]