Goldman Sachs (GS) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Goldman Sachs (GS) closed at $256.16 in the latest trading session, marking a -0.11% move from the prior day. This change lagged the S&P 500's daily gain of 0.35%. Meanwhile, the Dow gained 0.23%, and the Nasdaq, a tech-heavy index, added 0.26%.

Prior to today's trading, shares of the investment bank had gained 8.42% over the past month. This has outpaced the Finance sector's gain of 3.7% and the S&P 500's gain of 3.27% in that time.

GS will be looking to display strength as it nears its next earnings release, which is expected to be January 19, 2021. On that day, GS is projected to report earnings of $6.19 per share, which would represent year-over-year growth of 31.98%. Meanwhile, our latest consensus estimate is calling for revenue of $9.18 billion, down 7.8% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $19.26 per share and revenue of $42.14 billion, which would represent changes of -8.42% and +15.31%, respectively, from the prior year.

Any recent changes to analyst estimates for GS should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.25% lower. GS is currently a Zacks Rank #3 (Hold).

Digging into valuation, GS currently has a Forward P/E ratio of 13.32. This represents a discount compared to its industry's average Forward P/E of 13.84.

Also, we should mention that GS has a PEG ratio of 1.18. 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 2.17 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 23, putting it in the top 10% 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.

To follow GS in the coming trading sessions, be sure to utilize Zacks.com.


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