The Goldman Sachs stock price jumped in premarket trading after the company published strong quarterly results. The GS stock rose to $383, which is $10 below the year-to-date high of $393. The Wall Street juggernaut has a market capitalization of more than $129 billion.
Goldman Sachs earnings
Goldman Sachs is a leading Wall Street bank that operates in investment banking, consumer & wealth management, asset management, and global markets. The global markets division is divided into equities and FICC (Fixed Income Commodities and Currencies).
Goldman Sachs had an excellent quarter, helped by its investment banking segment. Its total revenue rose to more than $15.39 billion, which was its second-highest quarterly performance ever. Similarly, its earnings per share (EPS) increased to $15.02. Its net profit also grew to more than $5.49 billion.
Its investment banking revenue rose to more than $3.6 billion, helped by the strong Initial Public Offering (IPO) market. Its closely-watched Global Markets division’s revenue rose to $4.90 billion while its asset management and consumer business generated more than $5.13 billion and $1.75 billion in revenue. Notably, the company’s provision for credit losses was a net benefit of $92 million, compared with $1.5 billion for the same quarter in 2020.
Is Goldman Sachs a buy or sell?
Goldman Sachs is a strong banking franchise that has several benefits. For one, it is an established brand with an exceptional moat in its businesses. While it faces a lot of competition, it has established itself as a leader in several segments. Also, the company is set to benefit as the American economy recovers. Most importantly, it will play an important role as the Chinese economy recovers.
Another catalyst for the GS stock price is the Federal Reserve. While the Fed is expected to hike rates in 2023, the recent hawkish tone will benefit Goldman Sachs and other American banks. For example, data published today showed that the headline consumer price index rose by 5.4% in June while core CPI rose by 4.5%.
This is probably the reason why analysts are optimistic about the Goldman Sachs stock price. Analysts at respected institutions like KBW, Evercore ISI, JMP Securities, and Jefferies expect that the stock will rise to more than $400 in the near term.
Goldman Sachs stock price forecast
The chart below shows that the GS stock price has been in a strong bullish trend in the past few days. The stock has risen by more than 7% from its lowest level in July. It is also being supported by the 50-day and 25-day moving average. Also, it has moved above the neckline of the recently formed double-bottom pattern. Therefore, there is a possibility that the stock will keep rising as bulls target the upper side of the channel at $400. This is in line with what I predicted before the bank’s earnings.