Goldman Sachs (GS) Pre-Earnings: Analysts Expect Huge Earnings Surge

Shares of investment bank Goldman Sachs (GS) gained in today’s trading as investors await its Q4 earnings results on January 15 before the market opens. Analysts are expecting earnings per share to come in at $8.21 on revenue of $12.84 billion. This equates to a 49.8% year-over-year increase in earnings. It’s worth noting that Goldman Sachs has beaten earnings estimates for five consecutive quarters.

And there are reasons to believe that this losing streak could continue. In fact, according to TipRanks’ Bulls Say, Bears Say tool, bullish analysts point to a rebound in investment banking that should drive positive EPS revisions. In addition, Goldman Sachs is projected to see returns on equity that are above its competitors, which will allow it to continue providing investors with generous dividends and share repurchases.

Nevertheless, it is important to not forget about the bearish arguments, which includes a potential economic slowdown that could lead to a significant decrease in asset valuations. This would undoubtedly hurt investment banking activity such as IPOs.

What Do Options Traders Anticipate?

Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Indeed, the at-the-money straddle suggests that options traders expect a 4.05% price move in either direction. This estimate is derived from the $572.50 strike price, with call options priced at $12.18 and put options at $10.98.

Is GS Stock a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on GS stock based on 12 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 54% rally in its share price over the past year, the average GS price target of $635.44 per share implies 10.9% upside potential.

See more GS analyst ratings