Goldman Sachs (GS) earnings preview: on track for $5 billion of additional revenue?

4:05 pm ET, 12 Jul 2018

The Goldman Sachs Group (GS) is expected to report earnings on July 17 before market open.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 226.18, down -0.98%.

What are GS earnings expectations?  What news will the market be watching out for? 

Goldman Sachs is steadily making changes that may cause the market to revalue it higher. The company’s investment management business has become a priority in the past several years. Assets under supervision now exceed $1.4 trillion, while related investment management revenue has recently clocked in at around 20% of net revenue compared with 11%-12% before 2008. Investment management is a relatively stable, high-return-on-capital business that is well suited to the current regulatory environment.

Retail and commercial banking have also emerged as actual strategies. Goldman had a rapid increase in deposits to $39 billion in 2009 from $15 billion in 2007, probably due to the view that the market wanted the company to have more steady deposit funding during the financial crisis, but then deposits decreased in 2010 and remained relatively flat at $46 billion in 2011. However, Goldman has recommitted to the banking effort with its push into digital lending and purchase of deposits from GE Capital. Loans receivable are now over $60 billion, with deposits exceeding $130 billion.

Goldman Sachs is arguably the top global investment bank and can earn above its cost of capital in the new financial sector environment. Other investment banks that aren’t in as advantageous of a position are restructuring their operations, and Goldman can pick up any business up for grabs. Additionally, the company has a three-year plan for increasing net revenue by $5 billion, which is focused on some of its newer business lines and customer segments that it hasn’t historically targeted.

The Goldman Sachs Group, Inc. has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 59 cents ($3.95 actuals vs. $3.36 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 71 cents ($5.02 actuals vs. $4.31 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 78 cents ($5.68 actuals vs. $4.90 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 128 cents ($6.95 actuals vs. $5.67 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 18% year-over-year to $4.67, while revenue is expected to grow 10% year-over-year to $8.71 billion.  

Goldman Sachs (GS) forward P/E ratio is 9.01, and it’s low compared to its industry peers’ P/E ratio.

Goldman Sachs (GS) average analyst price target ($272.67) is 20.55% above its current price ($226.18). For the latest price and information on Goldman Sachs, please visit Finstead and search for "GS price" or "GS news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Wells Fargo & Co (WFC) earnings preview: revenue decline to be seen

5:01 am ET, 11 Jul 2018

Wells Fargo & Company (WFC)  is expected to report earnings on July 13 before market open.  The report will be for the fiscal quarter ending June 2018. Shares are trading at $55.89, up 1.18%.

What are WFC earnings expectations?  What news will the market be watching out for?  

Wells Fargo is the top deposit gatherer in the United States. Its strategy rests on deep customer relationships, sound risk management, and operational excellence.  Wells Fargo consistently paid less for balance sheet funding than most of its competitors over the past decade, and has also generated more revenue per dollar of assets than most peers over time, because of a loyal base of longtime customers.

Unlike its major competitors, Wells is not a top player in the capital markets. Its business model is more akin to regional banks than to money center institutions. Wells Fargo generates less than half the investment banking fees of companies like JPMorgan Chase, Goldman Sachs, and Bank of America, and trading gains made up only a small percentage of noninterest income. 

Wells Fargo relies on the more stable revenue generated by its brokerage, advisory, and asset management businesses. It competes to a large extent with regional peers, and its scale advantages should grow in importance as technology and compliance spending increase fixed costs across the industry. Wells Fargo deserves a lower cost of capital--and higher multiple--than riskier peers.

Wells Fargo’s sales culture overheated in recent years. Rather than attempting to improve its customers’ financial lives, management chose to increase revenue at all costs, introducing poorly designed incentive programs for front-line employees. This decision led to widespread fraud and risked relationships and reputation built over decades. 

Customers did not abandon Wells Fargo amid scandals and new programs focused on deepening active relationships will actually generate more revenue--and less wasted employee time--than overly ambitious product sales goals.

Wells Fargo & Company has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 5 cents ($1.07 actuals vs. $1.02 forecast) in FQ2’17;
  • Delivered on the analyst EPS estimate ($1.04 actuals vs. $1.04 forecast) in FQ3’17;
  • Missed analyst EPS estimates by 7 cents ($.97 actuals vs. $1.04 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 5 cents ($1.12 actuals vs. $1.07 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 5% year-over-year to $1.12, while revenue is expected to decline 3% year-over-year to $21.56 billion.  

Over the last month, Wells Fargo & Company (WFC) returned +0.56%.

Wells Fargo & Company (WFC) average analyst price target ($61.44) is 9.93% above its current price ($55.89).

For the latest price and information on Wells Fargo & Company, please visit Finstead and search for "WFC price" or "WFC news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

JPMorgan Chase (JPM): What Does The Future Look Like?

6:45 pm ET, 05 Apr 2018

 JPMorgan Chase’s (NASDAQ: JPM) stock price barely increased in today’s trading

Jamie Dimon, the company's CEO, praised President Trump because of his tax cuts and deregulation while criticizing his trade and immigration policies beacause they will likely hurt growth in the United States.

According to Dimon, it is possible for the bank to grow and penetrate into new markets by investing excess capital stemming from the new federal tax cuts and constructive regulatory environment since the 2016 presidential elections.

According to Dimon, JPMorgan can earn a 17% return on the tangible equity that exceeds the target before the enactment of corporate tax cuts. It is also above the company’s 2017 performance by almost 4%.

CEO Dimon pointed out to Wall Street's low-profit estimates and declared that he would concentrate on buybacks to return capital to JPM's shareholders. This is indeed good news for the shareholders.

Dimon holds an opinion that buying back a big block of share would enhance the earnings per share by 2%-3% in the upcoming 5 years, with the tangible book value remaining virtually constant. Currently, the company has 1.6 times tangible book ratio which is below Dimon's threshold.

Per Finstead Research, JP Morgan has the average price target of $119. The stock price has an upside of about 9%.

JPMorgan's valuation is considered to be not overly conservative or aggressive. Based on the forward P/E ratio, JPMorgan is ahead of CMSGS, and  BAC, but behind WFC.  

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Goldman Sachs Group, Inc. (The) (GS) Stock Guide

Updated at: 4:41 am ET, 22 Jul 2020

Before we start: if you're looking for GS stock price, you can quickly find it out by visiting Finny and typing "GS quote". If you're looking for a quick scoop on GS stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "GS". You'll get all this info in one place. Or you can just type "GS news" to get the latest stock news.

Looking to buy or sell Goldman Sachs Group, Inc. (The) (GS)? Interested in getting the full scoop on GS, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this GS stock guide, we'll address key questions about GS, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are GS earnings?
2. When is GS earnings date?
3. What is GS dividend?
4. What is GS dividend yield?
5. What is GS stock forecast (i.e., prediction)?
6. GS buy or sell? What is GS Finny Score?
7. What are the reasons to buy GS? Why should I buy GS stock?
8. What are the reasons to sell GS? Why should I sell GS stock?
9. What are GS key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are GS earnings?

GS trailing 12-month earnings per share (EPS) is $18.47.

2. When is GS earnings date?

GS earnings date is October 13, 2020.

3. What is GS dividend?

GS forward dividend is $5.00.

4. What is GS dividend yield?

GS forward dividend yield is 2.87%.

Analyst Predictions

5. What is GS stock forecast (i.e., prediction)?

Based on GS analyst price targets, GS stock forecast is $212.83 (for a year from now). That means the average analyst price target for GS stock is $212.83. The prediction is based on 27 analyst estimates.

The low price target for GS is $160.00, while the high price target is $301.00.

GS analyst rating is Hold.

Analysis

6. GS buy or sell? What is GS Finny Score?

#{finnyScore:67}Our quantitative analysis shows 4 reasons to buy and 2 reasons to sell GS, resulting in Finny Score of 67.

7. What are the reasons to buy GS? Why should I buy GS stock?

Here are the reasons to buy GS stock:

  • More stable investment management and net interest income could cause investors to reassess the company’s earnings quality and increase their willingness to pay a premium for it.
  • The company has a record of success with higher-volume lower-margin businesses, and this capability could prove useful in adapting to over-the-counter derivatives reform and changes in the fixed-income trading landscape.
  • Several of the company's primary U.S. and European competitors have been forced to restructure, which could give Goldman an opportunity to gain market share.
  • GS forward dividend yield is 2.87%, higher than the industry (0.64%) and sector (1.09%) forward dividend yields. See GS forward dividend chart.
  • GS Price/Book ratio is 0.77, which is low compared to its industry peers’ P/B ratios. See GS forward Price/Book ratio chart.
  • GS PEG ratio (P/E adjusted for growth) is 2.43, which is low compared to its industry peers’ PEG ratios. See GS PEG chart.
  • GS cash to debt ratio is 1.43, higher than the average industry (0.18) and sector (0.18) cash to debt ratio. See GS cash to debt chart.

8. What are the reasons to sell GS? Why should I sell GS stock?

Let's look at the reasons to sell GS stock (i.e., the bear case):

  • All else equal, lower leverage reduces returns to shareholders.
  • A severe financial shock could still turn market sentiment against the company.
  • As the current U.S. economic recovery period is getting old, a capital markets activity peak may come sooner rather than later.
  • GS quarterly revenue growth was -9.10%, lower than the industry and sector average revenue growth (1.44% and 2.03%, respectively). See GS revenue growth chart.
  • GS profitability is declining. The YoY profit margin change was -11.66 percentage points. See GS profitability chart.

Key Stats

9. What are GS key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for GS:

Metrics GS
Price $209.34
Average Price Target / Upside $212.83 / 1.66%
Average Analyst Rating Hold
Forward Dividend Yield 2.40%
Industry Capital Markets
Sector Financial Services
Number of Employees 36,600
Market Cap $71.62B
Forward P/E Ratio 9.10
Price/Book Ratio 1.93
Revenue (TTM) $37.16B
YoY Quarterly Revenue Growth 26.60%
Profit Margin 14.48%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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