Goldman Sachs
GS
$1018.38
-0.63%
Goldman Sachs is a leading global investment bank, providing financial advisory, underwriting, market making, and asset management services to corporations, governments, and institutions worldwide. Founded in 1869, it has been the top-ranked M&A advisor by revenue for 20 years and has diversified into stable fee-based businesses like asset and wealth management, which now comprise roughly 30% of post-provision revenue. The current investor narrative centers on the firm's ability to sustain revenue growth amid a volatile trading environment and rising interest rates, with recent Q2 2026 earnings showing a 22.9% YoY revenue surge driven by strong performance in Global Markets and Investment Banking. Debate continues over whether Goldman's valuation already reflects peak earnings and whether its pivot toward recurring fee income can offset cyclical trading volatility.…
GS
Goldman Sachs
$1018.38
Related headlines
GS 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Goldman Sachs's 12-month outlook, with a consensus price target around $1140.15 and implied upside of +12.0% versus the current price.
Average Target
$1140.15
0 analysts
Implied Upside
+12.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$730 - $1325
Analyst target range
Goldman Sachs is covered by 20 analysts, with a consensus recommendation of 'Hold' (mean rating 2.6 out of 5, where 1 is Strong Buy and 5 is Strong Sell). The average target price is $1,137.15, implying 7.2% upside from the current price of $1,061.23. The distribution shows a mix of bullish and neutral ratings: recent actions include Barclays and Wells Fargo at Overweight, while JP Morgan and UBS are Neutral. The consensus leans cautiously bullish, but the 'Hold' rating suggests limited near-term catalysts. The target range spans from a low of $730 to a high of $1,325, representing a 44% spread between the low and high. The high target of $1,325 implies 24.9% upside and likely assumes continued revenue growth from trading and investment banking, as well as multiple expansion. The low target of $730 implies 31.2% downside, reflecting risks such as a recession, regulatory changes, or a sharp decline in trading volumes. The wide spread indicates high uncertainty about the earnings trajectory. Recent ratings have been stable, with no major upgrades or downgrades in the past month, suggesting analysts are waiting for more clarity on the macroeconomic outlook.
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Bulls vs Bears: GS Investment Factors
Goldman Sachs presents a mixed picture: strong revenue growth and margin expansion are offset by a premium valuation and cyclical risks. The bull case rests on continued earnings momentum from trading and investment banking, supported by a low PEG ratio and analyst upside. The bear case highlights the high P/E premium, negative free cash flow, and vulnerability to a downturn. Currently, the evidence slightly favors the bulls given the accelerating revenue and improving margins, but the key tension is whether the current earnings cycle is peaking. If revenue growth decelerates below 10%, the valuation premium could compress, leading to significant downside.
Bullish
- Strong Revenue Acceleration: Q2 2026 revenue surged 22.9% YoY to $38.4B, driven by Global Markets ($20.6B) and Investment Banking. This marks a significant acceleration from Q2 2025's $31.3B, indicating robust client activity and market share gains.
- Expanding Profit Margins: Operating margin improved to 30.0% in Q2 2026 from 15.9% a year ago, while net margin rose to 17.2% from 11.9%. This operating leverage shows revenue growth outpacing expense increases, boosting profitability.
- Attractive PEG Ratio: With a PEG ratio of 0.65x (based on forward earnings growth), the stock appears undervalued relative to its growth rate. This suggests the market is not fully pricing in the earnings momentum from the 22.9% revenue growth.
- Analyst Upside Potential: The average analyst target of $1,137.15 implies 7.2% upside from the current price of $1,061.23, while the high target of $1,325 suggests 24.9% upside. This indicates potential for further gains if earnings momentum continues.
Bearish
- High Valuation Premium: The trailing P/E of 16.9x is a 13% premium to the financial sector average of ~15x, and the P/B ratio of 2.2x is well above the sector average of 1.5x. This leaves little room for error if earnings disappoint.
- Negative Free Cash Flow: TTM free cash flow is -$41.9B due to working capital swings in the trading book. While common for banks, this negative cash flow raises concerns about capital generation and dividend sustainability.
- Cyclical Earnings Risk: Goldman's earnings are highly tied to trading volumes and investment banking fees, which can decline sharply in a recession. The 52-week low of $694.05 is 34.6% below the current price, illustrating downside risk.
- Consensus Hold Rating: With a mean analyst rating of 2.6 (Hold) and a wide target spread ($730-$1,325), the consensus reflects uncertainty. Recent downgrade waves for bank stocks suggest limited near-term catalysts.
GS Technical Analysis
Goldman Sachs is in a sustained uptrend, with the stock up 47.6% over the past year, significantly outperforming the S&P 500's 16.5% gain. The current price of $1,061.23 sits at 69% of its 52-week range ($694.05 - $1,153.99), indicating the stock is in the upper half of its range but not yet at overbought extremes. This positioning suggests bullish momentum remains intact, though the stock has pulled back from its July 15 high of $1,152.07, warranting caution near resistance. Short-term momentum shows a 1-month decline of -1.5% and a 3-month gain of 14.5%, contrasting with the 1-year uptrend. The 1-month pullback could signal a temporary consolidation after the strong rally from March lows near $782, rather than a trend reversal. The stock's beta of 1.29 implies 29% more volatility than the market, amplifying both upside and downside moves. Key support lies at the 52-week low of $694.05, while resistance is at the 52-week high of $1,153.99. A breakout above $1,154 would signal renewed bullish momentum, while a breakdown below $1,000 (recent June lows) could indicate a deeper correction. The stock's 1-month relative strength of -2.2% versus the S&P 500 suggests short-term underperformance, but the 1-year relative strength of +31.1% underscores its long-term leadership.
Beta
1.29
1.29x market volatility
Max Drawdown
-19.8%
Largest decline past year
52-Week Range
$694-$1154
Price range past year
Annual Return
+40.7%
Cumulative gain past year
| Period | GS Return | S&P 500 |
|---|---|---|
| 1m | -0.1% | +0.2% |
| 3m | +10.2% | +3.7% |
| 6m | +8.9% | +8.0% |
| 1y | +40.7% | +18.2% |
| ytd | +11.4% | +9.6% |
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GS Fundamental Analysis
Goldman Sachs' revenue trajectory is accelerating, with Q2 2026 revenue of $38.4 billion up 22.9% year-over-year, compared to Q2 2025 revenue of $31.3 billion. The multi-quarter trend shows sequential improvement: Q1 2026 revenue was $17.2 billion (driven by a one-time gain), while Q4 2025 revenue was $30.1 billion. Revenue segments reveal Global Markets contributed $20.6 billion and Investment Management $9.2 billion, highlighting the dominance of trading and the growth in fee-based income. This growth is driven by heightened client activity in fixed income, currencies, and commodities, as well as a rebound in investment banking fees. The company is highly profitable, with Q2 2026 net income of $6.6 billion and a gross margin of 52.7%. Net margin improved to 17.2% from 11.9% in Q2 2025, reflecting operating leverage. Operating margin expanded to 30.0% from 15.9% a year ago, driven by revenue growth outpacing expense increases. The balance sheet shows a debt-to-equity ratio of 4.88, typical for a bank, but free cash flow is negative at -$41.9 billion TTM due to working capital swings in the trading book. However, the firm has $179.5 billion in cash and a current ratio of 0.83, indicating ample liquidity. ROE stands at 13.7%, above the cost of equity, signaling value creation.
Quarterly Revenue
$38.4B
2026-06
Revenue YoY Growth
+22.9%
YoY Comparison
Gross Margin
52.7%
Latest Quarter
Free Cash Flow
$-41.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GS Overvalued?
Since net income is positive ($6.6 billion), the primary valuation metric is the P/E ratio. The trailing P/E is 16.9x, while the forward P/E is 14.5x, implying the market expects earnings growth. The gap between trailing and forward P/E suggests a 14% expected earnings increase, consistent with the 22.9% revenue growth. Compared to the financial sector average P/E of approximately 15x, Goldman's trailing P/E of 16.9x represents a 13% premium. This premium is justified by its superior ROE (13.7% vs. sector average ~10%) and revenue growth (22.9% vs. sector ~5%). However, the P/B ratio of 2.2x is above the sector average of 1.5x, reflecting the market's willingness to pay for its franchise value. Historically, Goldman's trailing P/E has ranged from 6.2x (Q3 2021) to 25.8x (Q2 2023). The current 16.9x is near the midpoint of this range, suggesting the stock is fairly valued relative to its own history. The P/E is below the 5-year average of ~18x, indicating potential upside if earnings momentum continues. The PEG ratio of 0.65x (based on forward earnings growth) suggests the stock is undervalued relative to its growth rate.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 6x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Goldman Sachs carries a debt-to-equity ratio of 4.88, typical for a bank but elevated compared to non-financials. The negative free cash flow of -$41.9B TTM is a concern, driven by working capital needs in the trading book. While the current ratio of 0.83 indicates ample liquidity, the reliance on short-term funding exposes the firm to liquidity crunches in stressed markets. Revenue concentration in Global Markets (54% of Q2 2026 revenue) means a downturn in trading volumes could severely impact earnings, as seen in Q3 2024 when net income fell to $2.99B from $4.11B in Q4 2024.
Market & Competitive Risks: The stock's beta of 1.29 implies 29% more volatility than the market, amplifying downside in sell-offs. The trailing P/E of 16.9x is a 13% premium to the sector average, leaving it vulnerable to multiple compression if earnings growth slows. Regulatory risks include potential changes to capital requirements or trading restrictions. Recent news of a downgrade wave for bank stocks (July 9, 2026) highlights that valuations may be pricing in perfection, and the Fed's pivot toward rate hikes historically leads to 10%+ drawdowns in the S&P 500, which would disproportionately hit high-beta names like GS.
Worst-Case Scenario: A severe recession could cause trading revenues to plummet and investment banking fees to dry up, while credit losses rise. In such a scenario, earnings could fall to levels seen in 2023, pushing the stock to its 52-week low of $694.05, representing a 34.6% decline from the current price of $1,061.23. The analyst low target of $730 implies a 31.2% downside. Historical max drawdown of -19.84% (from recent highs) suggests a more moderate correction, but a recession could exceed that.
