Goldman Sachs is set to report its third-quarter profit, with expectations of lower earnings and revenue amidst recent stock price volatility. Investors are closely watching how CEO David Solomon handles disclosed losses in the consumer banking unit.
Troy D. Hanson
October 17, 2023
Goldman Sachs Group Inc. is set to report its third-quarter profit on Tuesday, joining the ranks of the six largest U.S. banks. Despite reduced expectations from Wall Street and weak stock prices, here's what investors can anticipate from the upcoming announcement.
Analysts tracked by FactSet are projecting Goldman Sachs to report earnings of $5.74 per share, a decrease from $8.25 per share in the same quarter last year. It's noteworthy that the estimated earnings of $5.74 per share have significantly decreased from three months ago when analysts predicted earnings of $6.82 per share. On the other hand, Estimize, a platform that crowdsources estimates from various sources, including academics, analysts, and retail investors, is expecting an EPS of $6.02.
According to the FactSet consensus, Goldman Sachs is expected to post $11.15 billion in third-quarter revenue. This represents a decline from $11.98 billion recorded during the same period last year. Estimize, on the other hand, is forecasting revenue of $11.31 billion.
It is worth noting that Goldman Sachs' stock was the only major U.S. bank to achieve a positive performance in the third quarter, with a modest gain of 0.3%. However, over the past month, the stock has witnessed an 8.5% decline, while the Dow Jones Industrial Average experienced a 1.9% drop.
In conclusion, as Goldman Sachs releases its third-quarter results, investors will be keenly observing the earnings and revenue figures amidst a backdrop of reduced expectations and recent stock price volatility.
What to Watch for: Goldman Sachs CEO Under Scrutiny
Goldman Sachs Chief Executive, David Solomon, is currently facing scrutiny due to disclosed losses in the consumer banking unit, causing criticism from within the company. Investors will be closely watching for any hints about how Solomon is handling the situation.
While some banks have experienced positive surprises in trading revenue from volume in Treasurys and other assets, potentially including Goldman Sachs, other areas of investment banking have been volatile.
Analysts have been lowering their expectations for Goldman Sachs due to a lackluster deal environment for mergers and acquisitions, as well as initial public offerings.
Additionally, analysts will be seeking additional clues about how Goldman Sachs is managing its consumer business, following the reported sale of its GreenSky unit for $500 million last week.
Bank of America Corp. and Morgan Stanley are also scheduled to report their third-quarter earnings on Tuesday and Wednesday respectively. JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co. released their earnings reports on Friday.
Also read: Goldman Sachs sheds GreenSky lending platform but still faces lack of low-cost deposits, analyst says