Results: The Goldman Sachs Group, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Simply Wall St · 10/18 12:37

The Goldman Sachs Group, Inc. (NYSE:GS) just released its quarterly report and things are looking bullish. The company beat forecasts, with revenue of US$13b, some 8.0% above estimates, and statutory earnings per share (EPS) coming in at US$8.40, 21% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Goldman Sachs Group

earnings-and-revenue-growth
NYSE:GS Earnings and Revenue Growth October 18th 2024

Taking into account the latest results, the most recent consensus for Goldman Sachs Group from 16 analysts is for revenues of US$54.4b in 2025. If met, it would imply a meaningful 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 21% to US$41.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$53.4b and earnings per share (EPS) of US$40.31 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$548, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Goldman Sachs Group at US$614 per share, while the most bearish prices it at US$450. This is a very narrow spread of estimates, implying either that Goldman Sachs Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Goldman Sachs Group's growth to accelerate, with the forecast 8.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Goldman Sachs Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Goldman Sachs Group following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$548, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Goldman Sachs Group going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Goldman Sachs Group , and understanding them should be part of your investment process.