Goldman Sachs Shares Shine with Impressive Quarterly Performance
Trading Revenue Surges 33% Year-Over-Year
A recent analysis by Keefe, Bruyette & Woods’ David Konrad has reiterated an Outperform rating on Goldman Sachs Group Inc (NYSE:GS) shares, accompanied by a price forecast increase to $690 from $686. The impressive quarterly performance was driven by substantial gains in trading and continued growth in Asset Management.
Equities Remain Stable Amid Seasonal Trends
Trading revenue saw a remarkable 33% year-over-year surge, despite a tough comparison. Equities remained stable quarter-over-quarter, unaffected by usual seasonal trends. The firm’s strategy of leveraging its balance sheet was evident, with equity financing rising 16% from the previous quarter and 36% year-over-year.
Attractive Option for Capital Markets Investors
Although the stock remains pricey relative to historical multiples at 1.92x TBV, it is still considered an attractive option for those looking to invest in capital markets. The robust revenues from capital markets and asset management have led the analyst to raise the 2025 earnings estimate by $1.80 to $47.15 and the 2026 earnings estimate by $0.65 to $53.00.
Strong Demand for Deal-Making
The analyst notes that there was strong demand for deal-making, with backlogs rising quarter-over-quarter. The strength in Markets was led by Equities, which stood out this quarter at $3.5 billion, surpassing expectations by $1.41 per share. This was driven by increased intermediation revenue from both derivatives and cash products.
Management Fees Reach $2.8 Billion
Management fees reached $2.8 billion, marking a 15% increase and a $0.15 per share beat compared to KBWe’s estimates. Furthermore, Goldman Sachs continued to reduce its on-balance-sheet investments, now totaling $36.5 billion.
Current Market Performance
GS shares are trading higher by 0.88% at $611.28 at the last check Thursday. With its impressive quarterly performance and strong demand for deal-making, Goldman Sachs remains an attractive option for investors looking to tap into the capital markets.
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