Goldman Sachs (NYSE:GS) has been reducing its workforce as the financial services giant struggles to grow due to decreased activity levels in various segments of investment banking. While the bank has considerably lowered its headcount, it is once again contemplating job cuts as part of its annual performance review process.
A Financial Times report highlighted that Goldman Sachs plans to trim 1-5% of its employees who are identified as underperformers during its performance review process. At the beginning of this year, Goldman Sachs laid off 3,200 employees. Further, the company eliminated 250 positions in May 2023.
This comes when its CEO, David Solomon, faces internal backlash due to the recent layoffs, departure of several top bankers, lower pay, and weak financial performance. Investors should note that the company’s revenue decreased by 7% in the first six months of 2023. At the same time, Goldman Sachs’ earnings fell about 36% year-over-year.
During the Q2 conference call, Solomon said that “activity levels in many areas of investment banking hover near decade-long lows and clients largely maintained a risk-off posture over the course of the quarter.” This has weighed on the financial performance of Goldman Sachs and its stock price, which has underperformed the S&P 500 Index (SPX) year-to-date. Though Goldman Sachs struggles to grow its revenue and financials, let’s look at what the Street recommends for its shares.
Is Goldman Sachs Stock a Buy, Sell, or Hold?
The ongoing weakness in its financial performance and macro uncertainty keep analysts cautious in the short term. Goldman Sachs stock has a Moderate Buy consensus rating on TipRanks, reflecting 12 Buy and six Hold recommendations.
Analysts’ average 12-month price target of $391.75 implies 21.68% upside potential from current levels.
