Goldman Sachs is Monday's IBD Stock Of The Day as the Dow and S&P 500 banking stock eyes a buy point just above a key trading level amid its 55% advance this year.
Morgan Stanley analyst Betsy Graseck on Monday upped the price target on Goldman Sachs shares to 736, up from 570. That analyst expects President-elect Donald Trump to create a favorable environment for large-cap banking stocks.
Part of that will be higher capital-markets activity, and a "more favorable regulatory framework" likely to encourage mergers and acquisitions along with IPOs.
"While the (Republican) sweep also brings with it tariff and immigration changes, the size and impact to the economy is unknown today," Graseck added.
With the fourth quarter fast coming to an end, analysts project EPS growing 49% with revenue rising 7%. For the full year, the consensus puts Goldman Sachs profit up 60% to $36.63 per share on sales totaling $51.71 billion, a 12% gain compared with 2023. Analysts expect 2025 earnings per share of $42.74 and revenue coming in at $54.94 billion.
On Oct. 15, the global investment bank reported Q3 earnings of $8.40 per share to easily top FactSet expectations for $6.89. Net revenue rose 7% to $12.7 billion, well above expectations for $11.77 billion.
Net interest income rose to $2.62 billion. Goldman Sachs recorded a 20% increase in investment banking revenue while investment management revenue rose 10%. The bank increased its provision for credit losses to $397 million, up from $282 million in Q2 and $7 million last year, respectively.
Goldman Sachs Stock Performance
GS shares edged down 0.9% to 594.12 during Monday's market action. The stock has forged a three-weeks-tight pattern, according to MarketSurge charts. The traditional tight buy point is 612.73, the all-time high that GS hit on Nov. 29.
Shares are finding support just above the stock's 21-day exponential moving average. Year to date, Goldman Sachs stock has gained 55%. That includes a 17.5% jump in November.
Last week, Keefe Bruyette analyst David Konrad raised the firm's price target on Goldman Sachs to 686, up from 570, maintaining an outperform rating on the shares. The U.S. bank stocks have had a strong run following better-than-expected earnings and, more important, the election results, the analyst tells investors in a research note.
Bruyette wrote that there are "potential tangible outcomes" postelection of Donald Trump to drive higher earnings, including investment banking, trading and market-sensitive revenues like custody and asset management.
On Nov. 25, HSBC analyst Saul Martinez downgraded Goldman Sachs to hold from buy, and increased the price target to 608 from 569. Martinez said he remains positive on the fundamental outlook for Goldman. However, he added that investors should be wary of arguments that an investment banking supercycle is set to drive shares much higher.
The Dow banking stock has a robust 91 Composite Rating. Goldman Sachs has a 90 Relative Strength Rating and an 87 EPS Rating.
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