Goldman Sachs (GS) closed the most recent trading day at $202.22, moving -0.13% from the previous trading session. This change lagged the S&P 500’s daily gain of 2.02%. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 2.71%.
Heading into today, shares of the investment bank had lost 4.07% over the past month, lagging the Finance sector’s loss of 0.85% and the S&P 500’s loss of 0.39% in that time.
GS will be looking to display strength as it nears its next earnings release. On that day, GS is projected to report earnings of $4.46 per share, which would represent a year-over-year decline of 6.89%. Meanwhile, our latest consensus estimate is calling for revenue of $8.53 billion, up 2.5% from the prior-year quarter.
GS’s full-year Zacks Consensus Estimates are calling for earnings of $12.28 per share and revenue of $39.19 billion. These results would represent year-over-year changes of -41.61% and +7.23%, respectively.
Any recent changes to analyst estimates for GS should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 23.53% lower. GS is currently a Zacks Rank #3 (Hold).
In terms of valuation, GS is currently trading at a Forward P/E ratio of 16.48. Its industry sports an average Forward P/E of 13.89, so we one might conclude that GS is trading at a premium comparatively.
Also, we should mention that GS has a PEG ratio of 6.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Financial – Investment Bank stocks are, on average, holding a PEG ratio of 1.04 based on yesterday’s closing prices.
The Financial – Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 49, putting it in the top 20% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.