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The Goldman Sachs Group, Inc. (GS), based in New York, is a global investment banking, securities, and investment management firm that provides a wide range of financial services. Valued at $158.2 billion by market cap, the company serves a diversified client base that includes corporations, financial institutions, governments, and individuals.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and GS fits right into that category, signifying its substantial size, stability, and dominance in the capital market industry.
Goldman Sachs has a strong global presence and diversified services that reduce risk and create growth opportunities. Its focus on technological innovation, including the Marquee platform, enhances client connectivity and trade execution. Additionally, its robust Global Investment Research supports its advisory services with insights on thousands of companies and economies.
However, the leading financial services firm has fallen 5.7% from its 52-week high of $517.26, which it hit on July 31. GS stock is up 5.7% over the past three months, underperforming the broader Financial Select Sector SPDR Fund’s (XLF) 8.8%gains over the same time frame.
However, in the longer term, GS leads with a 50.7% rise over the past year and a 26.5% return in 2024. By contrast, XLF is up 19.6% on a YTD basis and 30.9% over the past 52 weeks.
To confirm the bullish price trend, GS has been trading above its 50-day moving average since early August and above its 200-day moving average since mid-November.
Recently, Goldman Sachs successfully challenged the Federal Reserve's increased capital requirements following its June stress test, which had initially projected over $40 billion in potential losses. After appealing the Fed's decision, the SCB requirement was lowered from 6.4% to 6.2%, allowing Goldman Sachs to maintain common equity equal to 13.7% of its risk-weighted assets. This reduction enables Goldman Sachs to enhance capital distributions, including a 9.1% dividend increase and a $30 billion share repurchase program, positioning the bank for an upward trend in stock prices.
Following the release of its Q2 earnings results on July 15, Goldman Sachs saw its stock rise by 2.6%. The company reported a profit of $3.04 billion or $8.62 per share, significantly exceeding analysts' expectations, thanks to robust debt underwriting and fixed-income trading.
To emphasize the stock’s outperformance, rival Morgan Stanley (MS) has underperformed GS. MS stock has gained 17.4% in the past 52 weeks and is up 6.8% on a YTD basis.
With its recent outperformance compared to the broader financial services sector, analysts remain reasonably optimistic about GS’ prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it, and the mean price target of $449.14 is only a 5.3% premium from current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
