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

Zacks Equity Research

Goldman Sachs (GS) closed the most recent trading day at $198.09, moving -0.78% from the previous trading session. This change lagged the S&P 500's daily loss of 0.32%. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 0.34%.

Coming into today, shares of the investment bank had lost 9.38% in the past month. In that same time, the Finance sector lost 6.12%, while the S&P 500 lost 4.64%.

Investors will be hoping for strength from GS as it approaches its next earnings release. The company is expected to report EPS of $5.53, down 11.94% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.62 billion, down 0.31% from the year-ago period.

GS's full-year Zacks Consensus Estimates are calling for earnings of $22.80 per share and revenue of $35.43 billion. These results would represent year-over-year changes of -9.77% and -2.04%, respectively.

It is also important to note the recent changes to analyst estimates for GS. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. GS is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that GS has a Forward P/E ratio of 8.76 right now. For comparison, its industry has an average Forward P/E of 10.35, which means GS is trading at a discount to the group.

Also, we should mention that GS has a PEG ratio of 0.73. 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 1.01 as of yesterday's close.

The Financial - Investment Bank industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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