The Goldman Sachs Group, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
A week ago, The Goldman Sachs Group, Inc. (NYSE:GS) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Goldman Sachs Group delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$19b-11% above indicated-andUS$17.01-30% above forecasts- respectively 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Goldman Sachs Group's 21 analysts is for revenues of US$73.7b in 2027. This would reflect an okay 3.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 5.5% to US$74.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$73.0b and earnings per share (EPS) of US$72.49 in 2027. So the consensus seems to have become somewhat more optimistic on Goldman Sachs Group's earnings potential following these results.
See our latest analysis for Goldman Sachs Group
There's been no major changes to the consensus price target of US$1,037, 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. There are some variant perceptions on Goldman Sachs Group, with the most bullish analyst valuing it at US$1,250 and the most bearish at US$730 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Goldman Sachs Group's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2027 being well below the historical 5.1% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Goldman Sachs Group is also expected to grow slower than other industry participants.
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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Goldman Sachs Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 estimates - from multiple Goldman Sachs Group analysts - going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Goldman Sachs Group that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.