Goldman Sachs (NYSE: GS) is scheduled to report its fiscal Q2 2022 results on Monday, July 18, 2022. Trefis expects Goldman Sachs to beat the consensus estimates of revenues and earnings. The investment bank posted better than expected results in the last quarter, despite a 27% y-o-y decrease in the top-line. This was driven by a significant drop in asset management revenues, followed by negative growth in the investment banking business. On the flip side, the global markets and consumer & wealth management segments reported higher revenues. Trefis Team expects the same trend to continue in the second quarter.
Trefis estimates Goldman Sachs’ valuation to be around $392 per share which is 34% above the current market price of $293.
1) Revenues expected to beat the consensus estimates Goldman Sachs’ revenues grew 33% y-o-y in 2021 to $59.3 billion. It was mainly driven by a 58% jump in investment banking, followed by an 87% rise in asset management, and a 25% growth in consumer & wealth management units.
Trefis estimates Goldman Sachs’s fiscal Q2 2022 revenues to be around $11.53 billion, 5% above the $10.94 billion consensus estimate. We expect the consumer & wealth management and global markets to drive second-quarter results.
2) EPS is likely to beat the consensus estimates Goldman Sachs Q2 2022 adjusted earnings per share are expected to be $8.06 per Trefis analysis, almost 11% above the consensus estimate of $7.25. The bank had a strong run in 2021, with its adjusted net income increasing by 137% y-o-y to $21.2 billion. It was partly due to growth in the top line and partly due to a favorable decrease in the provisions for credit losses. That said, the trend changed in the first quarter of 2022, with the firm posting a 43% y-o-y drop in the adjusted net income to $3.8 billion. The decline was because of lower revenues and higher provisions figures. Overall, Goldman Sachs is likely to report an annual EPS of $38.67 for the full year of 2022.
3) Stock price estimate 34% higher than the current market price We arrive at Goldman Sachs’ valuation, using an EPS estimate of around $38.67 and a P/E multiple of just above 10x in fiscal 2022. This translates into a price of $392, which is 34% above the current market price of around $293.
Goldman Sachs Long (Buy) Enter at: 300.03 T.P_1: 325.00 T.P_2: 340.47 T.P_3: 367.11 T.P_4: 392.00 S.L: 271.54
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