Goldman Sachs Group Inc. (NYSE:GS) climbed to a new 52-week high on Wednesday after posting record second-quarter results, but Citizens kept its Market Perform rating, arguing that the stock’s strong run already reflects much of the improving earnings outlook.
Strong Quarterly Results Beat Expectations
Citizens analysts Devin Ryan and Noah Katz said Goldman posted results well above expectations, driven by strength across investment banking, equities, fixed income trading and asset management.
The brokerage noted that second-quarter earnings per share of $20.98 exceeded its $15 estimate by 40% and topped the Street consensus of $14.48 by 45%. Revenue climbed 39% year over year to $20.34 billion, about $4 billion above consensus. Goldman also generated a 23.5% return on equity during the quarter.
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Broad-Based Growth and AI Tailwinds
Citizens said the revenue outperformance came from Goldman’s core franchise rather than one-time gains. Record results in equities trading and financing, stronger fixed-income performance and improving investment banking activity demonstrated broad-based operating momentum.
The analysts also highlighted growing opportunities tied to artificial intelligence, saying the AI investment cycle is expanding demand across data centers, energy, infrastructure and capital markets activities.
Alternatives Business and Fundraising Remain Key Drivers
The brokerage also pointed to record alternatives fundraising and disciplined expense management as factors that could support earnings beyond the quarter.
Goldman raised $59 billion of third-party alternatives capital during the quarter and now expects more than $125 billion of fundraising this year.
Higher Earnings Forecasts, but Valuation Limits Upside
Following the strong results, Citizens raised its 2026 earnings estimate to $72.55 per share from $64.38 and increased its 2027 estimate to $74.25 from $69.75.
Despite the higher forecasts, Citizens reiterated its Market Perform rating. The firm said Goldman deserves a premium valuation because of its improving earnings mix, market-share gains and capital flexibility.
However, it cautioned that the shares already price in much of the favorable outlook, leaving less room for upside if trading activity normalizes or investment banking recovery slows.
GS Price Action: Goldman Sachs Group shares were up 0.43% at $1144.91 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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