Goldman Sachs’ (GS) share price is one of the best performers in recent decades. The stock price of Goldman Sachs (GS) has been a top performer in the past few decades.
The stock rose in recent months, with nine straight months of gains. This year it has increased by 36 percent, beating out other major US banks such as JPMorgan Chase, Citigroup Bank of America and Morgan Stanley which rose by 33, 20, 22, and 15 respectively.
Goldman Sachs is still undergoing a turnaround
Since David Solomon became CEO of Goldman Sachs after Lloyd Blankfein stepped down, it has been a good year for the Wall Street giant. The company has grown by 18%, beating out all other competitors except Morgan Stanley which has gained over 184%.
Goldman, Morgan Stanley, Bank of America and Citigroup in Solomon
The rally of the company has been rocky, as they have made several mistakes. The company had to cut back on its ambitious plans when it tried to transition from Wall Street into Main Street.
Goldman, for example, acquired GreenSky 2021 at a cost of $2.24billion and then sold it 2023 to a large loss. The company also reduced its relationship with Apple because it did not produce the expected results.
Goldman Sachs also faced challenges after the boom of mergers and acquisitions (M&As) and Initial Public Offerings (IPOs) ended in 2023. Goldman Sachs, in contrast to JPMorgan makes substantial amounts of money through its investment bank division.
Goldman’s revenue fell from $58 billion to $45.2 billion. Goldman’s net profit also dropped from $21 billion at its peak to more than $8.5 billion.
Goldman Sachs has experienced a number of notable executive departures. Anne Marie Darling left Goldman Sachs earlier this year. Beth Hammack and Beth Hammack were among the top executives who resigned.
Goldman Sachs has started to show signs of recovery, in part due to the Federal Reserve’s decision to maintain high interest rates longer. Goldman Sachs’ net interest income jumped by over $6.35 billion from $4.7 billion to 6.35 billion dollars last year.
Goldman Sachs’ Q2 Earnings Download
Goldman Sachs’ results were higher than expected and provided more proof that the company was improving.
The total revenue was $12.73 billion, while the net income and earnings per share (EPS), respectively, rose to $3.04 and $8.62 billion.
Its ongoing efforts to establish itself as a leader in wealth management have helped the company achieve a better performance. Asset and wealth management revenue grew by 27%, as assets under management increased to $1.4 trillion.
Goldman Sachs results revealed that the company was beginning to expand its core segments. The number of transactions increased investment banking fees by over 1 billion dollars, or 21%. The bank conducted a study that showed M&A transactions rose from $265 to $275 in the first six months of this year. In the same time period, deals increased by 19%.
Analysts predict that the deal-making activity will recover when rates begin to fall and there is greater clarity about who will be the next US President. Donald Trump is a great candidate due to his willingness to adopt light-touch regulations.
Biden’s FTC was able to stop many of the largest deals. The FTC sued to block Nvidia’s purchase of ARM Holdings, and Albertson’s merger with Kroger. The agency also stopped the merger between JetBlue and Spirit Airlines.
Another notable factor for investment banking is the 3 trillion backlog in portfolio company exits. Goldman will benefit from a low rate environment and friendly regulations.
Goldman FICC’s and equity business will benefit as well when interest rates begin to fall. This trading division has historically performed well during low interest rate periods.
Goldman Sachs is one of the most affordable big banks in America. Goldman has a price-to book ratio that is lower than Morgan Stanley and JP Morgan.
Goldman Sachs stock price analysis
Weekly chart of the GS shares shows a bullish trend in recent years. In December of last year, it crossed over the $367.74 key resistance level. It was a key level because it represented the largest swing for November 2022.
Goldman is consistently above 50-weeks and 100-weeks moving averages, while Relative Strength Index has formed a channel ascending.
Goldman is likely to continue its upward trend in the future as management focuses on cost reduction and wealth management. The psychological level of $600 is my target price for this stock.
There is however, a slight risk, which has been present for many years, that profits will be taken and the price of stock may fall.
The post Goldman Sachs is on the rise ahead of $3 trillion in tailwinds may change as new information becomes available
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