Here's Why Goldman Sachs (GS) Fell More Than Broader Market
The latest trading session saw Goldman Sachs (GS) ending at $491.14, denoting a -1.38% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily loss of 0.19%. Meanwhile, the Dow experienced a drop of 0.7%, and the technology-dominated Nasdaq saw an increase of 0.04%.
Shares of the investment bank witnessed a loss of 1.82% over the previous month, trailing the performance of the Finance sector with its gain of 1.52% and the S&P 500's gain of 1.95%.
Market participants will be closely following the financial results of Goldman Sachs in its upcoming release. The company is forecasted to report an EPS of $8.41, showcasing a 53.75% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $12.64 billion, indicating a 6.96% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $35.43 per share and revenue of $51.48 billion, which would represent changes of +54.92% and +11.31%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Goldman Sachs. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.17% fall in the Zacks Consensus EPS estimate. Goldman Sachs is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Goldman Sachs is currently trading at a Forward P/E ratio of 14.06. For comparison, its industry has an average Forward P/E of 17.3, which means Goldman Sachs is trading at a discount to the group.
Meanwhile, GS's PEG ratio is currently 0.78. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Financial - Investment Bank industry held an average PEG ratio of 1.21.
The Financial - Investment Bank industry is part of the Finance sector. With its current Zacks Industry Rank of 85, this industry ranks in the top 34% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report