Goldman Sachs
GS
$896.67
-0.41%
Goldman Sachs Group Inc. is a global investment bank and financial services firm operating across investment banking, global markets (trading and market making), asset management, wealth management, and a small, declining consumer lending portfolio. Founded in 1869 and listed on the NYSE since 1999, it is widely regarded as the preeminent M&A advisory franchise globally, having led global merger and acquisition advisory revenue for roughly two decades, while its Global Markets and Investment Management segments now anchor a more fee-based, capital-light earnings mix. The current investor narrative centers on the durability of the capital markets recovery: Q2 2026 revenue surged 22.9% year-over-year to $38.4 billion, with Global Markets contributing $20.6 billion and Investment Management $9.2 billion, reinforcing the thesis that the firm's trading and advisory engines are firing simultaneously. At the same time, the stock has pulled back sharply from its July highs amid rising bond yields and geopolitical tension, and the upcoming Anthropic IPO — for which Goldman is a lead advisor — has become a fresh catalyst debate, with bulls viewing the recent pullback as an attractive entry point into a franchise benefiting from a broadening IPO and advisory pipeline.…
GS
Goldman Sachs
$896.67
Related headlines
Investment Opinion: Should I buy GS Today?
The synthesized recommendation is Hold, with a constructive bias toward accumulating on further weakness. The core thesis is that Goldman is a high-quality franchise trading at a reasonable forward valuation (12.72x forward PE, 0.65 PEG) with 21.2% upside to the average analyst target of $1,134.15, but the near-term momentum deterioration (-10.09% in one month) and tepid hold consensus (2.6 mean) argue against chasing the stock at current levels. The recent pullback from the July high of $1,152.07 to $935.45 has improved the risk/reward, but the stock needs to stabilize before the longer-term uptrend can reassert itself.
Supporting evidence for the Hold rating is mixed but leans positive on fundamentals. Revenue grew 22.9% YoY in Q2 2026 to $38.43 billion, net margin expanded to 17.2% from 11.9%, and ROE stands at a solid 13.7%. The forward PE of 12.72x is roughly 25% below the trailing PE of 16.92x, implying the market expects meaningful EPS growth (consensus $77.09), and the PEG of 0.65 suggests the stock is undervalued relative to that growth. The dividend yield of 1.92% with a 30.7% payout ratio is well covered and leaves room for buybacks. However, the 2.20x price-to-book is near the high end of the historical range, and free cash flow of -$41.9 billion means traditional cash flow metrics are inapplicable, so the valuation rests entirely on earnings delivery.
The biggest risks that could invalidate the thesis are: (1) a capital markets slowdown that causes revenue growth to decelerate below 10%, which would make the 2.20x P/B unsustainable; (2) margin compression if compensation expenses rise faster than revenue; and (3) a macro risk-off event given the 1.283 beta. The rating would upgrade to Buy if the stock stabilizes above $950 and Q3 earnings confirm revenue growth above 15%, or if the forward PE compresses below 11x. It would downgrade to Sell if revenue growth falls below 5% or if net margin contracts below 12%. On balance, GS is fairly valued to slightly undervalued relative to its growth prospects, but not a compelling bargain at 2.20x book.
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GS 12-Month Price Forecast
Goldman presents a balanced risk/reward at $935.45: the fundamental momentum is strong (22.9% revenue growth, 17.2% net margin, 13.7% ROE) and the forward valuation is attractive (12.72x PE, 0.65 PEG), but the technical picture is weak (down 10.09% in a month, underperforming SPY by 10.78 points) and analyst conviction is low (hold rating, 2.6 mean). The base case (50% probability) targets $1,050-$1,150, implying 12-23% upside as earnings materialize, while the bear case (20%) targets $730-$850, implying 9-22% downside if capital markets stall. I would upgrade to bullish if Q3 earnings confirm revenue growth above 15% and the stock reclaims $1,000, or downgrade to bearish if revenue growth falls below 5% or net margin contracts below 12%. The Anthropic IPO in October is the key near-term catalyst that could resolve the debate in either direction.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Goldman Sachs's 12-month outlook, with a consensus price target around $1127.25 and implied upside of +25.7% versus the current price.
Average Target
$1127.25
0 analysts
Implied Upside
+25.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$730 - $1300
Analyst target range
Goldman Sachs is covered by 20 analysts, and the consensus recommendation is a hold with a recommendation mean of 2.6 on a scale where 1 is strong buy and 5 is strong sell — a genuinely neutral stance. The average price target is $1,134.15, which implies roughly 21.2% upside from the current price of $935.45, a meaningful gap that suggests analysts see the recent selloff as overdone relative to fundamentals. The consensus leans neutral-to-cautiously-bullish: the target implies solid upside, but the hold rating and 2.6 mean indicate analysts are not pounding the table, likely because the stock has already had a strong multi-year run and the near-term rate and geopolitical backdrop is uncertain. The target range is wide, from a low of $730.00 to a high of $1,325.00 — a spread of $595, or roughly 64% of the current price — which signals high uncertainty and low conviction among the analyst community. The high target of $1,325 assumes multiple expansion and a full capital-markets recovery, likely driven by a surge in IPO and M&A activity (the Anthropic IPO being a visible near-term catalyst) and continued trading strength; the low target of $730, essentially the 52-week low, prices in margin compression, a capital-markets slowdown, or a broader risk-off environment. Recent institutional ratings show a mixed but stable picture: Barclays, Wells Fargo, and B of A Securities maintain Overweight/Buy ratings, while JP Morgan, Keefe Bruyette & Woods, BMO Capital, and UBS sit at Neutral/Market Perform, and Oppenheimer downgraded to Underperform on June 30 — a bearish outlier. The wide target spread and the hold consensus suggest that while the risk/reward is skewed positively on a target basis, conviction is limited and the stock is likely to remain volatile until either earnings confirm the bull case or macro conditions deteriorate further.
Bulls vs Bears: GS Investment Factors
The bull case currently has stronger evidence on fundamentals: revenue growth of 22.9% YoY, net margin expansion from 11.9% to 17.2%, a forward PE of 12.72x, and a PEG of 0.65 all point to a franchise firing on all cylinders at a reasonable valuation. However, the bear case has stronger evidence on near-term price action and sentiment: the stock is down 10.09% in a month, underperforming SPY by 10.78 points, and the analyst consensus is a tepid hold with a 2.6 mean and an extraordinarily wide target range. The single most important tension is whether the capital markets recovery is structural or cyclical peak — if Q3 earnings confirm the 22.9% growth rate is sustainable, the forward PE of 12.72x will look deeply undervalued; if growth decelerates toward the 2024 run-rate, the stock could retest the $740 low. The Anthropic IPO and the broader advisory pipeline are the key swing factors that will resolve this debate over the next two quarters.
Bullish
- Revenue re-accelerating at 22.9% YoY: Q2 2026 revenue of $38.43 billion grew 22.9% year-over-year versus Q2 2025's $31.27 billion, driven by Global Markets at $20.6 billion and Investment Management at $9.2 billion. This is the strongest growth rate in the multi-quarter series and signals a broad capital markets rebound rather than a one-segment spike.
- Margin expansion shows operating leverage: Q2 2026 net margin expanded to 17.2% from 11.9% a year earlier, while gross margin rose to 52.7% from 45.4%. EBITDA margin reached 31.3% ($12.03 billion EBITDA), demonstrating that revenue growth is flowing through to the bottom line rather than being consumed by compensation.
- Forward PE of 12.72x implies undervaluation: The trailing PE of 16.92x compresses to a forward PE of 12.72x, a roughly 25% discount that reflects consensus EPS of $77.09 for the coming year. The PEG ratio of 0.65 is well below 1.0, suggesting the stock is cheap relative to its expected growth rate.
- Analyst target implies 21.2% upside: The average analyst price target of $1,134.15 implies 21.2% upside from the current $935.45, with a high target of $1,325.00. The recent pullback has widened this gap, suggesting analysts view the selloff as overdone relative to fundamentals.
Bearish
- Momentum has deteriorated sharply: The stock is down 10.09% over the past month and 8.25% over three months, underperforming SPY by 10.78 and 14.06 percentage points respectively. This bearish divergence between a rising 1-year trend (+17.7%) and a falling 1-month trend signals momentum traders are exiting.
- Analyst consensus is only a hold: The consensus recommendation is hold with a mean of 2.6 on a 1-5 scale, and the target range is extremely wide at $730 to $1,325 — a spread of $595, or 64% of the current price. This signals low conviction and high uncertainty among the 20 covering analysts.
- Negative free cash flow of -$41.9 billion: Trailing free cash flow is deeply negative at -$41.9 billion, driven by Q1 2026's -$32.4 billion operating cash flow as the firm deployed capital into trading assets. The PCF ratio of -6.09 confirms cash flow is not a valuation anchor, and the firm relies on financing activities (+$104.3 billion in Q1 2026) rather than operations.
- High leverage and low current ratio: Debt-to-equity of 4.88x is high in absolute terms, and the current ratio of 0.83 reflects reliance on short-term funding markets. While typical for an investment bank, this structure amplifies sensitivity to credit market dislocations and rate spikes.
GS Technical Analysis
Goldman Sachs is in a broad, choppy uptrend that has lost considerable steam: the stock is up 17.7% over the past year but sits at $935.45, only about 45.5% of the way up its 52-week range of $740.01 to $1,153.99, and just 2.3% higher year-to-date. That positioning — mid-range rather than near highs — signals a market that has grown skeptical of the momentum trade after a powerful run, and the 19.86% maximum drawdown confirms the stock has already endured a meaningful correction from its July peak. The stock is neither an overextended momentum name nor a deep-value falling knife; it is a high-quality franchise consolidating in the middle of its range while the market reassesses the rate and capital-markets backdrop. Recent momentum has deteriorated sharply and is diverging bearishly from the longer-term trend: the stock is down 10.09% over the past month and 8.25% over three months, even as the 1-year change remains positive at 17.7%. This divergence — a rising 1-year trend colliding with a falling 1-month trend — typically signals either a healthy mean-reversion pullback within an uptrend or the early stage of a trend reversal, and the relative strength data tilts toward caution: GS has underperformed SPY by 10.78 percentage points over the past month and 14.06 points over three months, while SPY itself gained 0.69% and 5.81% over those same windows. The 6-month change of +16.5% versus a 1-month change of -10.1% shows the pullback is recent and steep, suggesting momentum traders have been exiting and the stock needs to stabilize before the longer-term uptrend can reassert itself. Key technical levels are well defined: support sits at the 52-week low of $740.01, roughly 21% below the current price, while resistance is the 52-week high of $1,153.99, about 23% above. A breakout above $1,154 would confirm a resumption of the primary uptrend and likely require a catalyst such as a strong Q3 earnings beat or a surge in IPO/advisory activity, whereas a breakdown below the $740 area would signal a full trend reversal and validate the bearish momentum divergence. With a beta of 1.283, GS is roughly 28% more volatile than the S&P 500, meaning its recent 10% monthly decline translates into meaningful portfolio risk; position sizing should account for the fact that a 1% market move implies roughly a 1.28% move in GS, and the elevated short ratio of 3.78 suggests some traders are positioning for further downside.
Beta
1.28
1.28x market volatility
Max Drawdown
-22.2%
Largest decline past year
52-Week Range
$740-$1154
Price range past year
Annual Return
+14.2%
Cumulative gain past year
| Period | GS Return | S&P 500 |
|---|---|---|
| 1m | -10.6% | +0.3% |
| 3m | -12.2% | +2.6% |
| 6m | +3.9% | +16.5% |
| 1y | +14.2% | +14.3% |
| ytd | -1.9% | +12.0% |
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GS Fundamental Analysis
Goldman's revenue trajectory is re-accelerating impressively: Q2 2026 revenue of $38.43 billion grew 22.9% year-over-year versus Q2 2025's $31.27 billion, and the sequential progression from Q1 2026's $17.23 billion reflects the seasonal strength of the second quarter alongside a broad capital markets rebound. The multi-quarter trend is constructive — Q4 2025 revenue of $30.13 billion and Q3 2025's $32.15 billion both compare favorably to the 2024 quarterly run-rate in the low $30 billions — and the segment mix shows Global Markets at $20.6 billion and Investment Management at $9.2 billion, with trading and advisory activity driving the upside. The key question for the investment case is whether this growth is cyclical peak or structural: the 22.9% YoY jump is exceptional, and sustaining it will depend on IPO issuance, M&A volumes, and trading activity, all of which are sensitive to rates and market volatility. Profitability is robust and improving: Q2 2026 net income was $6.63 billion with a net margin of 17.2%, up from $3.72 billion and an 11.9% net margin in Q2 2025, while gross margin expanded to 52.7% from 45.4% a year earlier. The operating margin of 17.5% and EBITDA of $12.03 billion in Q2 2026 (a 31.3% EBITDA margin) underscore the operating leverage inherent in the investment banking model when revenue accelerates, and the trailing ROE of 13.7% is a solid, if not spectacular, return for a capital-markets franchise. The margin expansion is the single most important fundamental signal here — it shows that revenue growth is flowing through to the bottom line rather than being consumed by compensation and expenses, which is the classic bull case for Goldman in a capital-markets upcycle. The balance sheet tells a more nuanced story: debt-to-equity of 4.88x is high in absolute terms but typical for a global investment bank, and the current ratio of 0.83 reflects the firm's reliance on short-term funding markets. Free cash flow is deeply negative at -$41.9 billion on a trailing basis, driven by Q1 2026's -$32.4 billion operating cash flow as the firm deployed capital into trading assets and investments, and the PCF ratio of -6.09 confirms cash flow is not a meaningful valuation anchor for this business. The critical takeaway is that Goldman funds itself through its balance sheet and financing activities — Q1 2026 net cash from financing was +$104.3 billion — rather than operating cash flow, so FCF-based analysis is largely inapplicable; the relevant health metrics are ROE (13.7%), capital adequacy, and the firm's ability to generate fee revenue, all of which remain solid.
Quarterly Revenue
$38.4B
2026-06
Revenue YoY Growth
+22.9%
YoY Comparison
Gross Margin
52.7%
Latest Quarter
Free Cash Flow
$-41.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GS Overvalued?
Because Goldman Sachs is solidly profitable — Q2 2026 net income of $6.63 billion and trailing EPS of $0.06 on a per-share basis (reflecting the data's reported figure) — the PE ratio is the appropriate primary metric, and the trailing PE of 16.92x versus a forward PE of 12.72x implies the market expects meaningful earnings growth ahead. The gap between trailing and forward PE is substantial: the forward multiple is roughly 25% below the trailing multiple, which signals that consensus expects EPS to expand materially, consistent with the analyst estimated EPS average of $77.09 for the coming year. This compression from trailing to forward multiple is the market's way of pricing in the capital-markets upcycle, and it means the stock is cheaper on next year's earnings than it appears on a trailing basis. Relative to the broader financials sector, Goldman's 16.92x trailing PE and 2.20x price-to-book sit at a premium to many diversified banks but are broadly in line with or slightly below premier capital-markets peers, and the PEG ratio of 0.65 — well below 1.0 — suggests the stock is undervalued relative to its expected growth rate. The 2.20x P/B is the more telling metric for a bank: it is a premium to book value that reflects the market's confidence in Goldman's franchise and ROE, but it is not stretched relative to the firm's historical trading range. The dividend yield of 1.92% with a payout ratio of 30.7% is modest but well covered, leaving ample room for buybacks and reinvestment. Historically, Goldman's PE has ranged widely — from roughly 8.9x in early 2024 to over 25x in mid-2023 — and the current 16.92x sits in the middle-to-upper portion of that band, while the P/B of 2.20x is near the high end of its multi-year range (it traded near 0.93x in late 2023). That positioning suggests the market is pricing in a favorable but not euphoric outlook: the stock is not cheap on an absolute basis, but the forward PE of 12.72x and PEG of 0.65 argue that if earnings growth materializes as expected, the valuation is reasonable rather than stretched.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 6x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.0x
Enterprise Value Multiple
Investment Risk Disclosure
Goldman's financial structure carries inherent risks that are amplified by its business model. Debt-to-equity of 4.88x and a current ratio of 0.83 reflect heavy reliance on short-term wholesale funding, meaning a credit market dislocation could force rapid balance sheet deleveraging. Trailing free cash flow is -$41.9 billion, with Q1 2026 operating cash flow at -$32.4 billion as the firm deployed capital into trading assets; while this is normal for an investment bank, it means the firm has little cash flow buffer if trading revenues reverse. Revenue concentration is another concern: Global Markets contributed $20.6 billion of Q2 2026's $38.43 billion (54%), making earnings highly sensitive to trading volumes and volatility, which are inherently unpredictable. The 22.9% YoY revenue growth is exceptional and unlikely to be sustained indefinitely, so any deceleration could pressure the 17.2% net margin that investors are now extrapolating.
Market and competitive risks are elevated given the stock's premium positioning and macro sensitivity. At 2.20x price-to-book, GS trades at the high end of its multi-year range (it traded near 0.93x in late 2023), leaving little room for multiple compression if ROE (currently 13.7%) disappoints. The beta of 1.283 means a 1% market decline translates to roughly a 1.28% drop in GS, and the recent 10.09% monthly decline alongside a 10.78-point underperformance versus SPY shows how quickly sentiment can turn. Competitive pressure from peers like Morgan Stanley and boutique advisory firms could erode Goldman's M&A market share, while the rise of electronic trading and passive investing compresses trading margins. Recent news highlights macro headwinds: rising global bond yields signal higher-for-longer rates that pressure capital markets activity, and U.S.-Iran geopolitical tension is driving risk-off sentiment that disproportionately hurts high-beta financials.
The worst-case scenario would be a combination of a capital markets slowdown, margin compression, and a macro risk-off event. If IPO and M&A activity stalls (e.g., the Anthropic IPO is delayed or repriced lower), trading revenues normalize, and rates remain elevated, GS could retest its 52-week low of $740.01 — a decline of approximately 21% from the current $935.45. The analyst low target of $730.00 aligns closely with this level, confirming it as a realistic bear-case floor. A more severe scenario involving a credit event or a sharp equity market correction could push the stock below $700, implying a drawdown of 25% or more from current levels, consistent with the stock's historical maximum drawdown of 19.86% and the elevated short ratio of 3.78 indicating bearish positioning.
FAQ
The most severe risk is a capital markets slowdown: revenue growth of 22.9% YoY in Q2 2026 is exceptional and could decelerate sharply if IPO and M&A activity stalls, potentially sending the stock to the $730 low target (22% downside). Second is margin compression: the 17.2% net margin depends on operating leverage, and if compensation expenses rise faster than revenue, profitability could contract toward the 11.9% level seen in Q2 2025. Third is macro sensitivity: with a beta of 1.283, GS is 28% more volatile than the S&P 500, and rising bond yields or geopolitical tension (e.g., U.S.-Iran) could trigger outsized drawdowns — the stock already fell 19.86% from its peak. Fourth is balance sheet risk: debt-to-equity of 4.88x and a current ratio of 0.83 mean reliance on short-term funding, which could be disrupted in a credit event. Ranked by severity: capital markets slowdown, margin compression, macro risk-off, and funding disruption.
The 12-month forecast has three scenarios: bull case (30% probability) targeting $1,150-$1,325, driven by a strong Anthropic IPO, sustained 15%+ revenue growth, and multiple expansion toward 15x forward earnings; base case (50%) targeting $1,050-$1,150, assuming revenue growth moderates to 10-15% and net margin holds near 16-17%, with the stock grinding toward the analyst average target of $1,134.15; and bear case (20%) targeting $730-$850, if capital markets stall, revenue growth falls below 5%, and the stock retests its 52-week low of $740.01. The base case is most likely, hinging on the assumption that the capital markets recovery is durable but decelerating. The key variable is whether Q3 earnings confirm the Q2 growth rate was sustainable or a cyclical peak.
GS appears fairly valued to slightly undervalued on forward earnings but premium on book value. The trailing PE of 16.92x compresses to a forward PE of 12.72x, a 25% discount that implies the market expects significant EPS growth, and the PEG of 0.65 is well below 1.0, a classic undervaluation signal. However, the price-to-book of 2.20x is near the high end of its multi-year range (it traded near 0.93x in late 2023), reflecting confidence in the franchise but leaving little room for error. Relative to diversified banks, GS trades at a premium, but relative to premier capital-markets peers, it is broadly in line. The market is pricing in a favorable but not euphoric outlook: if EPS of $77.09 materializes, the stock is cheap; if growth stalls, the 2.20x P/B is vulnerable.
From a risk/reward perspective, GS is a reasonable buy for investors with a 12-24 month horizon and tolerance for volatility, but not a screaming bargain. The stock trades at $935.45 with 21.2% upside to the average analyst target of $1,134.15, and the forward PE of 12.72x with a 0.65 PEG suggests it is undervalued relative to expected EPS growth of $77.09. However, the biggest downside risk is a capital markets slowdown that could send the stock to the analyst low target of $730, implying 22% downside. The analyst consensus is only a hold (2.6 mean), and the stock is down 10.09% in a month, so near-term momentum is negative. It is a good buy for patient investors who can tolerate a potential 20% drawdown in exchange for 20%+ upside, ideally accumulating on further weakness toward $900.
GS is better suited for intermediate-to-long-term holding (12-24 months) than short-term trading. The stock's beta of 1.283 and 19.86% maximum drawdown make it too volatile for short-term traders without high risk tolerance, and the 1.92% dividend yield with a 30.7% payout ratio provides modest income but not enough to anchor a short-term position. The investment case depends on the capital markets recovery playing out over multiple quarters, with the Anthropic IPO and Q3/Q4 earnings as key catalysts — a timeline that favors patient investors. Earnings visibility is moderate: analyst EPS estimates range from $69.59 to $83.60, a wide spread reflecting uncertainty. A minimum holding period of 12 months is suggested to allow the forward PE of 12.72x to converge toward the analyst target of $1,134.15, though investors should be prepared for interim volatility given the recent 10.09% monthly decline.