Goldman Sachs
GS
$1018.38
-0.63%
Goldman Sachs Group Inc. is a leading global investment bank, providing financial advisory, underwriting, market making, and asset management services to corporations, governments, and institutions. As a storied institution founded in 1869, it has consistently ranked as a top M&A advisor for two decades, and has strategically pivoted toward more stable fee-based businesses like asset and wealth management, which now contribute roughly 30% of post-provision revenue. The current investor narrative centers on the firm's robust earnings growth, driven by strong performance in Global Markets and Investment Management, alongside concerns about geopolitical tensions and market volatility that could impact trading revenues. Recent news highlights Goldman's role in market movements, such as its positive contribution to the Dow Jones, while broader market sell-offs and Fed policy uncertainty create a mixed outlook for financial stocks.…
GS
Goldman Sachs
$1018.38
Related headlines
Investment Opinion: Should I buy GS Today?
We rate Goldman Sachs a Buy, anchored by its exceptional earnings growth and attractive valuation. The consensus is 'hold' with an average target of $1,140.15, implying 12% upside, but we see stronger potential given the PEG of 0.65 and forward PE of 13.81x. Key supports include 22.9% revenue growth, 78% net income growth, ROE of 13.74%, and net margin of 17.25%, all exceeding industry averages. The main risks are market cyclicality and high leverage; if revenue growth falls below 10% or PE exceeds 20x, we would downgrade to Hold. Overall, the stock is undervalued relative to its growth and profitability.
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GS 12-Month Price Forecast
The AI assessment leans bullish given Goldman's strong fundamental performance and attractive valuation. The main uncertainty is macro volatility, which could impact trading revenues. If the company maintains its growth trajectory and market conditions remain stable, the stock could re-rate higher. However, a deterioration in market conditions would warrant a downgrade to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Goldman Sachs's 12-month outlook, with a consensus price target around $1140.15 and implied upside of +12.0% versus the current price.
Average Target
$1140.15
0 analysts
Implied Upside
+12.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$730 - $1325
Analyst target range
Goldman Sachs is covered by 20 analysts, with a consensus recommendation of 'hold' and a mean rating of 2.6 (where 1 is strong buy and 5 is sell). The average price target is $1,140.15, implying a 12.0% upside from the current price of $1,018.38. The distribution includes 5 buys, 10 holds, and 5 sells, indicating a cautious but not bearish sentiment. The target price range spans from $730.00 (low) to $1,325.00 (high), with the high target assuming continued strong performance in trading and investment banking, while the low target reflects risks from market downturns or regulatory changes. Recent ratings actions have been mixed, with some firms like Barclays and Wells Fargo maintaining Overweight, while Oppenheimer downgraded to Underperform, and JP Morgan and UBS remain Neutral. The wide spread between low and high targets (595 points) signals high uncertainty about the stock's future, likely due to the cyclical nature of investment banking revenues and macroeconomic volatility.
Bulls vs Bears: GS Investment Factors
Goldman Sachs presents a compelling bull case with exceptional earnings growth, strong revenue diversification, and an attractive PEG ratio. However, the bear case highlights high leverage, cyclicality, and a cautious analyst stance. Currently, the bull side has stronger evidence given the robust fundamental performance and reasonable valuation. The key tension is whether the strong earnings momentum can persist amid geopolitical and macro headwinds, which would determine if the stock re-rates higher or faces multiple compression.
Bullish
- Exceptional earnings growth: Q2 2026 net income surged 78% YoY to $6.63B, with EPS of $21.27 versus $11.07 a year ago. This dramatic acceleration demonstrates strong operating leverage and broad-based strength across trading and investment banking.
- Strong revenue momentum: Revenue grew 22.9% YoY to $38.43B in Q2 2026, with Global Markets contributing $20.63B and Investment Management $9.22B. This diversification into fee-based businesses reduces earnings volatility.
- Attractive valuation with PEG of 0.65: The forward PE of 13.81x and PEG of 0.65 suggest the stock is undervalued relative to its growth rate. Analysts expect EPS to grow ~22.5% next year, making the current valuation compelling.
- Superior profitability metrics: ROE of 13.74% and net margin of 17.25% exceed industry averages, reflecting Goldman's strong franchise and efficient capital deployment. Operating margin expanded to 30.0% from 15.9% YoY.
Bearish
- High leverage and negative FCF: Debt-to-equity of 4.88x is typical for banks but amplifies risk. Free cash flow is -$41.92B TTM due to working capital swings, which could constrain capital returns if sustained.
- Cyclical revenue concentration: Global Markets (trading) remains a large revenue driver, making earnings sensitive to market volatility. A downturn in trading volumes could significantly impact results.
- Analyst caution with hold rating: Consensus is 'hold' with a mean rating of 2.6, and 5 of 20 analysts rate it a sell. The average target of $1,140.15 implies only 12% upside, limiting near-term appreciation potential.
- Geopolitical and macro risks: Recent news highlights geopolitical tensions and Fed policy uncertainty, which could lead to market sell-offs and reduced trading activity. Beta of 1.292 means the stock is 29% more volatile than the market.
GS Technical Analysis
Goldman Sachs is in a clear long-term uptrend, with the stock up 40.74% over the past year, significantly outperforming the S&P 500's 18.19% gain. The current price of $1,018.38 sits at 88.2% of its 52-week range (between $694.05 low and $1,153.99 high), indicating the stock is trading near its highs but below the peak. This positioning suggests strong momentum, though the recent pullback from the July high of $1,152.07 may signal a consolidation phase after a sharp rally. The stock's beta of 1.292 indicates it is about 29% more volatile than the market, which is typical for a financial stock but warrants attention for risk management.
Beta
1.29
1.29x market volatility
Max Drawdown
-19.8%
Largest decline past year
52-Week Range
$706-$1154
Price range past year
Annual Return
+40.7%
Cumulative gain past year
| Period | GS Return | S&P 500 |
|---|---|---|
| 1m | -0.1% | +0.3% |
| 3m | +10.2% | +4.0% |
| 6m | +8.9% | +8.3% |
| 1y | +40.7% | +20.2% |
| ytd | +11.4% | +9.6% |
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GS Fundamental Analysis
Goldman Sachs reported Q2 2026 revenue of $38.43 billion, a 22.91% year-over-year increase, marking a significant acceleration from the prior year's growth rates. The revenue trajectory has been robust, with quarterly revenues rising from $31.27 billion in Q2 2025 to $38.43 billion in Q2 2026, driven by strong performance in Global Markets ($20.63 billion) and Investment Management ($9.22 billion). This growth is notable as it reflects broad-based strength across the franchise, with investment banking and trading benefiting from increased market activity. The company's net income for Q2 2026 was $6.63 billion, up from $3.72 billion in the same quarter last year, representing a 78% increase, and EPS came in at $21.27, well above the prior year's $11.07. Gross margin improved to 52.66% from 45.41% a year ago, while operating margin expanded to 29.99% from 15.86%, indicating strong operating leverage. The firm's return on equity (ROE) stands at 13.74%, and net margin is 17.25%, reflecting solid profitability. However, the balance sheet shows a high debt-to-equity ratio of 4.88, typical for a bank, and free cash flow is negative at -$41.92 billion TTM, largely due to working capital swings and investment activities, but the firm maintains a strong liquidity position with $179.53 billion in cash.
Quarterly Revenue
$38.4B
2026-06
Revenue YoY Growth
+22.9%
YoY Comparison
Gross Margin
52.7%
Latest Quarter
Free Cash Flow
$-41.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GS Overvalued?
Given Goldman Sachs' positive net income, the most appropriate valuation metric is the price-to-earnings (PE) ratio. The trailing PE is 16.92x, while the forward PE is 13.81x, indicating the market expects earnings growth of about 22.5% over the next year. This forward discount suggests optimism about continued earnings expansion, supported by the strong recent results. Compared to the industry average PE of 15x (based on sector data), Goldman trades at a 12.8% premium, which is justified by its superior ROE of 13.74% and net margin of 17.25% versus industry averages. Historically, the stock's PE has ranged from 6.2x to 25.8x over the past five years, with the current 16.92x sitting near the middle of that range, indicating the stock is not overvalued relative to its own history. The PEG ratio of 0.65 suggests the stock is undervalued relative to its growth rate, making it an attractive value proposition.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 6x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are elevated due to Goldman's high leverage, with a debt-to-equity ratio of 4.88x, which amplifies losses in downturns. The negative free cash flow of -$41.92B TTM, though partly due to working capital swings, could pressure capital returns if it persists. Revenue concentration in trading (Global Markets) makes earnings highly sensitive to market volatility, as seen in the 78% YoY net income jump, which could reverse sharply in a downturn. Additionally, the firm's reliance on continued growth to justify its valuation premium is a risk if earnings decelerate.
FAQ
The key risks include: 1) High leverage (debt-to-equity of 4.88x) which amplifies losses in downturns. 2) Cyclicality of trading revenues, which can decline sharply in market downturns. 3) Macro risks such as geopolitical tensions and Fed policy changes, which could reduce market activity. 4) Regulatory changes that could increase capital requirements. The most severe risk is a market crash, which could lead to a 30%+ decline, as seen in the 52-week low of $694.
The 12-month forecast is moderately bullish. The base case (50% probability) targets $1,050-$1,150, aligning with the analyst average of $1,140. The bull case (30% probability) targets $1,150-$1,325, while the bear case (20% probability) could see $730-$850. The most likely scenario is moderate growth, driven by continued strength in trading and investment banking, but with some volatility.
GS is undervalued relative to its growth prospects. The trailing PE of 16.92x and forward PE of 13.81x are below the industry average of 15x when adjusted for growth. The PEG ratio of 0.65 indicates the stock is trading at a discount to its expected earnings growth. Historically, the PE has ranged from 6.2x to 25.8x, and the current level is near the middle, suggesting fair value. The market expects strong earnings growth, which is justified by recent performance.
GS is a good buy for investors seeking growth with a reasonable valuation. The stock trades at a forward PE of 13.81x with a PEG of 0.65, indicating undervaluation relative to its growth. Analyst targets imply 12% upside, but the high target suggests 30% upside. The main risk is market cyclicality, which could lead to significant drawdowns. For long-term investors with a 3-5 year horizon, GS offers a compelling risk/reward.
GS is suitable for long-term investment, given its strong franchise and growth potential. The stock's beta of 1.292 indicates higher volatility, making it less suitable for short-term trading unless one can time market cycles. The dividend yield of 1.92% provides some income, but the main return driver is capital appreciation. A minimum holding period of 3-5 years is recommended to ride out market cycles and benefit from earnings growth.