Key Takeaways
- Goldman Sachs earned $17.01 per share on $18.7 billion of revenue, its second-highest quarterly total ever and far above consensus.
- Advisory fees hit a record $1.65 billion, while management and other fees reached a record $3.6 billion.
- The stock has still fallen 18.4% over three months and trades about 23% below its 52-week high.
- The Neos deal, a possible Anthropic IPO and CEO succession planning will shape what comes next.
Records usually lift stocks. At Goldman Sachs (GS), they barely register right now.
The bank reported third-quarter revenue of $18.7 billion, up 23% from a year earlier and its second-best quarter on record. EPS came in at $17.01, crushing estimates, and return on equity reached 18.7%. sec
The shares closed Thursday at $891, down 1.5%. They have lost 18.4% over the past three months and sit well below the $1,154 peak.
David Solomon offered a clue on the earnings call. Renewed Middle East tensions and energy disruption, he said, had “added complexity to the outlook.” bullfincher
(Translation: nobody knows how long this deal boom lasts.)
Records across the trading floor
Global Banking & Markets did most of the work:
- Segment revenue rose 32% to $13.46 billion.
- Advisory fees hit a record $1.65 billion, and Goldman kept its top M&A ranking with $1.5 trillion of announced deals this year.
- Equities revenue jumped 72%, its second-best quarter after a record Q2.
Fixed income was the soft spot, flat at $3.47 billion.
The quarter also absorbed an accelerated charitable contribution, which trimmed EPS. Even so, revenue topped the roughly $16.8 billion consensus by about 11%.
Quarterly EPS shows how far the earnings base has moved…
Q3 fell short of the $20.98 Q2 record, yet it still landed about 39% above the year-ago quarter.
The fee business keeps compounding
The quieter story sits in Asset & Wealth Management. Revenue rose 14% to $5.05 billion, and assets under supervision hit a record $4.1 trillion after $97 billion of long-term inflows, the 35th straight quarter of net inflows. benzinga
Those fees matter because they hold up when trading cools. Management and other fees rose 22% to $3.6 billion and have topped $10 billion year to date.
Goldman is buying more of that stability. It agreed to acquire ETF provider Neos for $2.3 billion, and it is pitching permanent capital vehicles to private equity clients alongside Evercore (EVR).
The deal pipeline helps too. Goldman and Morgan Stanley (MS) are lined up to lead Anthropic’s potential IPO, an offering that could value the company at as much as $2 trillion.
Trading grabs the headlines, yet this is the line that steadies earnings.
AWM produced about 27% of Q3 revenue, a cushion Goldman lacked in past cycles.
TIKR tracks 26 analysts on Goldman Sachs. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Goldman Sachs, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Goldman Sachs’ Analyst Ratings
Cheaper multiple, better bank
The market is paying less for this earnings stream than it did in the summer. Goldman trades at 12.4x forward earnings and 2.39x book value. Morgan Stanley, with a bigger wealth arm, trades at 13.8x and 2.71x.
That gap looks hard to justify on returns. Goldman’s 17.8% trailing ROE is stronger, and analysts expect its EPS to grow about 20% a year over the next two years, against 15.5% at Morgan Stanley.
How much has the multiple compressed?
Goldman’s discount to Morgan Stanley persists even as its returns run higher.
The risks are real. Trading volatility cuts both ways, and technology spending stays elevated. Succession adds another variable, since the board has discussed naming John Waldron CEO with Solomon moving to executive chairman, although Goldman says there is no set timeline.
My take: I think the selloff reflects cycle fear more than anything Goldman did wrong. A 12.4x multiple for a firm earning nearly 19% on equity already prices in a sharp slowdown. Equities and advisory revenue can fall fast, but the fee base is now big enough to soften the hit, and the $1,037 average price target implies about 16% upside.
The Q4 report in mid-January is the next checkpoint. It will show whether the record advisory backlog converts into closed deals or slips into 2027.
So what is Goldman Sachs stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
