We're upgrading our Goldman Sachs rating after a strong quarter bodes well for the future
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Goldman Sachs on Tuesday reported a strong quarter that should help stem the stock's brutal decline since the summer. Revenue in the third quarter rose 23% year over year to $18.68 billion, the second-highest in company history and well ahead of the $16.71 billion consensus, according to the analyst estimates compiled by data provider LSEG. Earnings per share (EPS) in the three months ended in September surged 39% to $17.01, also a huge beat versus the $13.02 per share consensus, according to LSEG data. GS YTD mountain Goldman Sachs YTD Shares of Goldman were up more than 4% shortly after the open before giving up much of those gains. We think the quarter was strong enough to justify stepping in to take advantage of the weakness since the stock's record-high close of $1,152 on July 15. However, material upside from here likely has more to do with the Iran war, U.S. interest rate dynamics, and the pace of AI funding than anything fundamentally going on at the bank. From an execution perspective, Goldman appears to be firing on all cylinders. Bottom line The strong showing from Goldman Sachs would have looked even better if not for the impact of an accelerated charitable contribution made in the quarter, which weighed on earnings and return on equity results. The bread-winning Global Banking & Markets division delivered strong results, which was very much behind the relatively...
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