Followers | 686 |
Posts | 143260 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Friday, January 22, 2021 9:16:07 AM
By: Zacks Investment Research | January 21, 2021
Goldman Sachs (GS) is a captain of high finance and the banking sector's knight in shining armor. The firm is known for its quick trading action and best-in-class deal-making investment bank. GS has soared over 50% to all-time highs since Biden was elected President on November 3rd, and I believe this stock has legs to continue running.
The economic downturn and proceeding recovery have been an unexpected tailwind for Goldman, driving the business to record profitability the past 2 quarters, with a robust double-digit topline expansion. Due to Goldman's trading and deal-making profit drivers, the bank didn't see the same margin-pinches from the ultra-low interest rates that commercial banks like JP Morgan (JPM) and Bank of America (BAC) did.
GS is expected to continue pushing growth and profitability as a slew of big deals and market action extends into 2021. Analysts have been increasingly optimistic about GS following its record earnings on Tuesday, pushing its EPS estimates on every time horizon and propelling the stock into a Zacks Rank #1 (Strong Buy).
Recent Earnings
The firm illustrated unbelievable results in the wake of economic uncertainty, taking advantage of new market opportunities. GS reported recorded breaking earnings of $12.08 per share, demonstrating 158% year-over-year growth, and blew Zacks Consensus estimates out of the water by over 72%. Its sales were quite strong as well, showing $11.74 billion, up 18% from the same quarter last year, beating estimates by 22%.
Equity trading and its deal-making investment banking (IB) segment were the two largest growth drivers for this best-in-class investment bank. Goldman's investment banking sector was up 24% in 2020 compared to 2019, and this segment looks like it's just heating up with Q4 IB earnings up 33% from Q3 and 27% year-over-year. Its equities-underwriting portion of IB was booming in 2020 as a record number of businesses hit the public exchanges.
454 companies IPO'ed in 2020, raising over $167 billion, far surpassing the previous record made in 1999 amid the dot-com mania. Goldman was an enormous beneficiary of this push to the public markets. The firm drove over $3.4 billion last year from equity underwriting alone, up 130% from 2019. It looks like this subsegment is only beginning to simmer, with this past quarter generating $1.12 billion, up 195% year-over-year and 30% quarter-over-quarter.
GS's global markets division was its biggest topline driver as the business strategically navigated the choppy market waters and drove this segment's revenue up 43% to a record $21.16 billion, 47% of its total topline in 2020. Equities sales & trading at Goldman appear to be still riding a tailwind as the stock market surges to seemingly no end. This group is up 16% quarter-over-quarter.
What's Next For GS?
David Solomon is proving himself at the helm of this remarkable firm. Since Solomon was named CEO and Chairman of Goldman Sachs on October 1st, 2018, GS shares are up over 28%. This may not sound like a lot, but GS has navigated the 2018 year-end sell-off and the most significant economic contraction in over a decade. GS is sizably outperforming its cohorts JPM and BAC, who have only returned 18% and 8%, respectively. Below is a 1-year price chart of GS (blue) compared to JPM (red) and BAC (green).
Investors & traders pulled profits from all the major banks following earnings over the past week. GS was no expectation as its share price dipped from an all-time high of $309.41 down to the $290 we are trading at today. This has created a tremendous buying opportunity, with 9 out 13 analysts calling GS a strong buy today. The most optimistic price targets are north of $400 a share, representing a 69% upside.
I remain a GS buyer despite the run it has already had. This company is adaptable and resourceful, and no matter what the economy throws at it, GS comes out on top.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent GS News
- US Index Futures Rise Amid Earnings Season Optimism, Oil Prices Rebound • IH Market News • 08/07/2024 09:49:12 AM
- Joby Aviation Seeks Australian Certification, Arcadium Lithium Projects Suspended Due to Oversupply, and More • IH Market News • 08/07/2024 09:47:32 AM
- Goldman Sachs Alternatives Makes $440 Million Strategic Investment in BrightNight to Fund Continued Growth • PR Newswire (US) • 08/01/2024 11:00:00 AM
- Virtú Investments Acquires Iconic Skyglass Tower in Downtown Seattle • GlobeNewswire Inc. • 08/01/2024 01:00:29 AM
- Upbeat Earnings News May Spark Early Rally On Wall Street • IH Market News • 07/31/2024 01:07:54 PM
- ASML Rises 7% on Export Waiver; Intel Plans Layoffs, HSBC $3B Buyback Announced, and More • IH Market News • 07/31/2024 09:55:50 AM
- osapiens raises $120 million funding round led by Growth Equity at Goldman Sachs Alternatives • Business Wire • 07/29/2024 12:00:00 PM
- Alphabet Unveils AlphaProof and AlphaGeometry 2; OpenAI Tests SearchGPT; Apple Loses Market Share in China • IH Market News • 07/26/2024 10:07:41 AM
- Meta Unveils Llama 3 AI Model, Elon Musk’s X Poll Backs Tesla’s $5B xAI Investment, and More • IH Market News • 07/24/2024 09:53:32 AM
- Johnson Controls Division Sold for $8 Billion; Alphabet’s Offer Rejected by Wiz; AMD President Announces Retirement • IH Market News • 07/23/2024 10:00:52 AM
- Betterment and Goldman Sachs Launch Industry-First Tax-Smart Bonds Portfolio • PR Newswire (US) • 07/18/2024 02:30:00 PM
- US Index Futures Steady, Oil Prices Dip Amid China Slowdown, Key Earnings Reports Ahead • IH Market News • 07/16/2024 10:12:04 AM
- Match Group Soars 8% Amid Potential Sale Pressure; Deutsche Bank Anticipates 2Q Loss, and More • IH Market News • 07/16/2024 10:10:09 AM
- Market Rises Amid Trump Attack and Key Earnings Week • IH Market News • 07/15/2024 10:36:55 AM
- Alphabet Nears $23 Billion Wiz Acquisition, Trump Media Stock Soars 63% Pre-Market, and More • IH Market News • 07/15/2024 10:34:36 AM
- Calvert Impact Announces National Program to Capitalize Small Businesses • Business Wire • 07/12/2024 01:30:00 PM
- SEC Closes Paxos Investigation, Trump Joins Bitcoin Conference, Ether ETFs Anticipation Soars • IH Market News • 07/11/2024 07:23:29 PM
- U.S. Futures Fall Ahead of CPI Report; Oil Prices Rise on Falling Inventories and Stronger Demand • IH Market News • 07/11/2024 10:21:45 AM
- Microsoft and Apple Exit OpenAI Board, TSMC Exceeds Forecasts with Record Revenue, and Other Key Updates • IH Market News • 07/10/2024 10:42:17 AM
- TAIT announces equity investment from Goldman Sachs Alternatives' Private Equity Business • PR Newswire (US) • 07/09/2024 01:00:00 PM
- TAIT announces equity investment from Goldman Sachs Alternatives' Private Equity Business • PR Newswire (Canada) • 07/09/2024 01:00:00 PM
- Nike Stock Drops 14% in Pre-Market; Nokia Acquires Infinera for $2.3 Billion, and More News • IH Market News • 06/28/2024 10:50:25 AM
- Dow Dips, Nasdaq Gains, Oil Prices Rise • IH Market News • 06/26/2024 11:00:03 AM
- SolarEdge Stock Falls 13%, Wegovy Approved in China, Grail Nasdaq Debut, Apple Rejects Meta Chatbot • IH Market News • 06/25/2024 10:36:11 AM
- Trump Media Resells Stocks and Warrants; KB Home Exceeds Q2 Expectations, and More News • IH Market News • 06/20/2024 10:55:11 AM
Maybacks Global Entertainment and ZEASN Technology Private Ltd. Sign Global Licensing Agreement • AHRO • Aug 8, 2024 7:00 AM
SANUWAVE Will Host a Conference Call on August 13, 2024 at 8:30 AM (ET) to Present Q2 Financial Results • SNWV • Aug 8, 2024 6:59 AM
Kona Gold Beverage Inc. Signs Letter of Intent with Bemax, Inc. to Sell Kona Gold, LLC • BMXC • Aug 7, 2024 10:00 AM
Btab Ecommerce Group, Inc. Launches Investor Connect AI Chatbot for Enhanced Investor Engagement and Lead Generation • BBTT • Aug 7, 2024 9:00 AM
Hydromer, Inc. Announces Preliminary Unaudited Second Quarter 2024 Financial Results and Provides Business Update • HYDI • Aug 7, 2024 8:52 AM
North Bay Resources Announces Mt. Vernon Gold Mine Startup, Sierra County, California • NBRI • Aug 5, 2024 9:00 AM