Prime Highlights:
Goldman Sachs reports fourth-quarter earnings before the market opens on January 15.
Analysts expect earnings of $8.22 per share and $12.39 billion in revenue.
Trading revenues for fixed income and equities expected at $2.45 billion and $3 billion, respectively.
Key Background:
Goldman Sachs is set to report its fourth-quarter earnings before the market opens on Wednesday, January 15. The firm has been buoyed by a strong performance in investment banking and trading, as Wall Street deals have experienced a notable rebound in recent months.
Analysts surveyed by LSEG are expecting Goldman Sachs to report earnings of $8.22 per share for the fourth quarter, alongside revenue of $12.39 billion. The bank’s trading revenue is anticipated to show robust numbers, with fixed income trading estimated to reach $2.45 billion and equities trading to bring in $3 billion, according to StreetAccount. Investment banking revenue is projected to hit $2.01 billion.
Goldman Sachs has experienced significant growth over the past year, with its shares rising by nearly 50% in 2024. The surge in the bank’s stock price has outpaced that of its major banking competitors, driven by optimism surrounding a more favorable economic outlook following the Federal Reserve’s easing cycle and the election of former President Donald Trump. Both of these factors are expected to stimulate an increase in mergers, acquisitions, and stock market transactions, which are contributing to Goldman Sachs’ favorable position heading into 2025.
The fourth-quarter results will offer a preview of the bank’s performance in the coming year, as both investment banking and trading revenues are expected to rise by double-digit percentages. Investment banking revenue for the entire industry grew by 29% during the quarter, fueled by increased activity in advisory services and equity capital markets, according to Dealogic data.
Additionally, Goldman Sachs is likely to see strong results from its asset and wealth management division, which CEO David Solomon has identified as a key growth engine for the firm. The buoyant stock market in late 2024 is expected to provide a further boost to this segment, helping drive the firm’s profitability.
Solomon’s leadership is significantly different from the prior year, when Goldman Sachs faced challenges stemming from its exit from consumer finance, an area that had underperformed and contributed to losses. In contrast, the strategic shift away from consumer finance has positioned the firm more favorably within the evolving financial landscape. Goldman’s earnings report will be followed by calls from industry peers, including JPMorgan Chase, Wells Fargo, and
Citigroup, all scheduled to release their results on Wednesday, while Bank of America and Morgan Stanley will report on Thursday.
