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New York-based The Goldman Sachs Group, Inc. (GS) is a financial institution that provides a range of financial services for corporations, financial institutions, governments, and high-net worth individuals. With a market cap of $186.3 billion, the company specializes in investment banking, trading and principal investments, asset management and securities services.
Shares of this leading global investment banking, securities, and asset and wealth management firm have outperformed the broader market considerably over the past year. GS has gained 73.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 30.6%. In 2024, GS stock is up 52.4%, surpassing the SPX’s 23.6% rise on a YTD basis.
Zooming in further, GS’ outperformance is also apparent compared to the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The exchange-traded fund has gained about 56.7% over the past year. Moreover, GS’ returns on a YTD basis outshine the ETF’s 38.3% gains over the same time frame.
GS' outperformance can be attributed to the strong performance of bank stocks, thanks to the economic resilience and rebound in capital markets. The re-election of Trump has raised hopes for a better 2025. The Federal Reserve lowering interest rates is expected to support banks' net interest income growth. GS is refocusing on its core strengths in investment banking and trading, while scaling back its consumer banking operations. It recently finalized a deal with Barclays PLC (BCS) to sell its GM credit card business. The company plans to ramp up lending to private equity and asset managers, and expand internationally. The focus on the private equity market aligns well with the company's strategic goals. Overall, the company's focus on core capital markets business and expansion in private credit lines provide a strong foundation for growth.
On Oct. 15, GS shares closed down marginally after reporting its Q3 results. Its EPS of$8.40 exceeded Wall Street expectations of $6.85. The company’s revenue, net of interest expense was $12.7 billion, topping Wall Street forecasts of $11.6 billion.
For the current fiscal year, ending in December, analysts expect GS’ EPS to grow 62.4% to $37.15 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 22 analysts covering GS stock, the consensus is a “Moderate Buy.” That’s based on 13 “Strong Buy” rating, one “Moderate Buy,” and eight “Holds.”
This configuration is less bullish than a month ago, with 14 analysts suggesting a “Strong Buy.”
On Nov. 14, Wells Fargo & Company (WFC) analyst Mike Mayo kept an “Overweight” rating and raised the price target on GS to $680, implying a potential upside of 15.6% from current levels.
While GS currently trades above its mean price target of $569.80, the Street-high price target of $661 suggests an upside potential of 12.4%.
