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Based in New York, The Goldman Sachs Group, Inc. (GS) is a global investment banking, securities, and investment management firm that provides a wide range of financial services. Valued at $143.26 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 its industry.
However, the leading financial services firm has fallen 5.8% from its 52-week high of $471.48, which it hit on May 20. Shares of GS are up 17.1% over the past three months, outperforming the Dow Jones Industrials Average’s ($DOWI) marginal gains over the same time frame.
Longer term, GS shares rose 33.9% over the past year, and in 2024, the stock is up 17.9%. By contrast, DOWI is up 3.7% on a YTD basis and 14.7% over the past 52 weeks.
To confirm the bullish price trend, GS has been trading above its 50-day moving average since mid-April and above its 200-day moving average since mid-November 2023.
On Apr. 15, GS shares closed up more than 2% after reporting Q1 net revenue of $14.21 billion, above its consensus estimate of $12.98 billion. For Q1, the company’s net revenues rose 16% year over year to $14.21 billion, and its net earnings increased 28% over the prior-year quarter to $4.13 billion. Its EPS came in at $11.58, representing an increase of 32% year over year.
GS’ recent outperformance can be attributed to the strength of its Global Banking & Markets division. Despite economic headwinds, debt and equity underwriting saw an uptick due to the recovery of the capital markets. The increase in investment banking fees also supported its robust quarterly results. The company’s fixed-income trading revenue also rose thanks to the jump in the mortgage, foreign exchange, and credit trading and financing. The ongoing recovery in dealmaking has also bolstered investors’ optimism.
Optimism also stemmed from CEO David Solomon’s statement that artificial intelligence will play a part in GS’ future, with GS likely to provide clients with AI expertise and financing solutions.
To emphasize the stock’s outperformance, rival Morgan Stanley (MS) has underperformed GS. MS stock has gained 11.1% in the past 52 weeks and is up 4.1% on a YTD basis.
With its recent outperformance compared to DOWI, analysts remain optimistic about GS’s prospects. The stock has a consensus rating of “Strong Buy” from the 22 analysts covering it, but the mean price target of $449.14 is only a 1.1% premium to current levels.
On the date of publication, Dipanjan Banchur 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.
