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Goldman Sachs (GS) Dips More Than Broader Markets: What You Should Know

·3 min read

Goldman Sachs (GS) closed the most recent trading day at $333.92, moving -0.74% from the previous trading session. This change lagged the S&P 500's daily loss of 0.67%. Elsewhere, the Dow lost 0.57%, while the tech-heavy Nasdaq lost 0.14%.

Prior to today's trading, shares of the investment bank had gained 0.9% over the past month. This has lagged the Finance sector's gain of 3.19% and the S&P 500's gain of 3.65% in that time.

Goldman Sachs will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $8.20, down 45.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.46 billion, down 15.8% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $34.33 per share and revenue of $47.47 billion, which would represent changes of -42.25% and -20%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Goldman Sachs. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 1.09% lower. Goldman Sachs is currently a Zacks Rank #4 (Sell).

Looking at its valuation, Goldman Sachs is holding a Forward P/E ratio of 9.8. Its industry sports an average Forward P/E of 13.68, so we one might conclude that Goldman Sachs is trading at a discount comparatively.

We can also see that GS currently has a PEG ratio of 0.77. 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. The Financial - Investment Bank industry currently had an average PEG ratio of 0.86 as of yesterday's close.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 204, putting it in the bottom 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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