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Goldman Sachs (GS) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Goldman Sachs (GS) closed at $197.40 in the latest trading session, marking a -0.09% move from the prior day. This change lagged the S&P 500's 0.45% gain on the day. Elsewhere, the Dow gained 0.36%, while the tech-heavy Nasdaq added 0.52%.

Prior to today's trading, shares of the investment bank had lost 6.17% over the past month. This has lagged the Finance sector's gain of 0.22% and the S&P 500's gain of 2.08% in that time.

GS will be looking to display strength as it nears its next earnings release, which is expected to be July 15, 2020. In that report, analysts expect GS to post earnings of $3.33 per share. This would mark a year-over-year decline of 42.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.55 billion, down 9.68% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.30 per share and revenue of $34.69 billion, which would represent changes of -32% and -5.09%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for GS. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 15.54% higher within the past month. GS is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, GS is holding a Forward P/E ratio of 13.81. Its industry sports an average Forward P/E of 13.97, so we one might conclude that GS is trading at a discount comparatively.

It is also worth noting that GS currently has a PEG ratio of 5.78. 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 1.59 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 45, which puts it in the top 18% 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.

To follow GS in the coming trading sessions, be sure to utilize Zacks.com.

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