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Goldman Sachs (GS) Gains But Lags Market: What You Should Know

Zacks Equity Research

Goldman Sachs (GS) closed at $207.21 in the latest trading session, marking a +0.08% move from the prior day. This move lagged the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq lost 0.17%.

Coming into today, shares of the investment bank had gained 0.02% in the past month. In that same time, the Finance sector gained 2.59%, while the S&P 500 gained 4.92%.

GS will be looking to display strength as it nears its next earnings release. In that report, analysts expect GS to post earnings of $5.53 per share. This would mark a year-over-year decline of 11.94%. Meanwhile, our latest consensus estimate is calling for revenue of $8.62 billion, down 0.31% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $22.80 per share and revenue of $35.43 billion, which would represent changes of -9.77% and -2.04%, respectively, from the prior year.

Any recent changes to analyst estimates for GS should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. GS currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, GS is holding a Forward P/E ratio of 9.08. Its industry sports an average Forward P/E of 10.84, so we one might conclude that GS is trading at a discount comparatively.

Also, we should mention that GS has a PEG ratio of 0.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Financial - Investment Bank stocks are, on average, holding a PEG ratio of 1.07 based on yesterday's closing prices.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 36% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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