Goldman Sachs reported its third-quarter earnings before the opening bell on Tuesday. The earnings per share (EPS) came in at $8.40, considerably higher than the $6.89 expected by Wall Street analysts surveyed by LSEG. The company also reported revenue of $12.70 billion, surpassing the $11.8 billion estimate.
Over the past two years, the Federal Reserve’s tightening campaign has presented a challenging environment for investment banks such as Goldman Sachs. However, as the Fed begins to ease rates, Goldman is poised to benefit. Corporations that have delayed acquisitions or fundraising are likely to become more active.
Additionally, Goldman’s asset and wealth management division stands to benefit from rising asset values as interest rates decline. Last week, rival investment banks set high expectations with better-than-anticipated results from trading and investment banking, helping them top earnings estimates.
Goldman Sachs exceeds analysts’ expectations
Goldman Sachs has followed suit with its strong performance. This story is developing. Please check back for updates.
Shares in Goldman Sachs rose 0.7% on Monday in anticipation of the bank’s quarterly report, which is due before the market opens on Tuesday. Wall Street consensus expects the bank to report adjusted earnings per share (EPS) of $6.89, up from $5.47 in the same quarter last year, on revenues of $11.80 billion, slightly down from $11.817 billion year-over-year. Over the last eight quarters, Goldman Sachs has met or exceeded analysts’ revenue and EPS expectations six times.
The bank’s report follows a bullish start to the earnings season, with rivals JPMorgan Chase and Wells Fargo both beating expectations on Friday. Goldman Sachs shares last traded at $516.30, compared to a median price target of $550, which reflects 23 analyst ratings: five ‘strong buy,’ eleven ‘buy,’ and seven ‘hold’ ratings. Year-to-date, Goldman Sachs shares are up 34.9%, outperforming the 24.1% gain for the S&P 500 financial services index and the 14.1% gain for the Dow Industrials.
