Banking, finance, and taxes
Goldman Sachs Down 11%, Worst Performing Dow Stock of 2016
Published:
Last Updated:
For the year to date, shares in Goldman Sachs Group Inc. (NYSE: GS) trade down 11% and are the worst performer among the 30 stocks that comprise the Dow Jones Industrial Avenue. The financial sector as a group is down 6.64% year over year, as of Friday’s close.
When the Federal Reserve in December raised its policy interest rate from a range of 0.00% to 0.25% to a new range of $0.25% to 0.50%, the move was viewed as positive for banks. Higher rates typically mean more banking revenues.
But stuff like Brexit happens, and what had begun as a good year for banks didn’t quite live up to the advance billing. Goldman, of course, is primarily an investment bank and while interest rates matter, they contribute only about 1% of the bank’s revenues. Investment management services, institutional client services and traditional investment banking services are what drive the other 99% of revenues.
Investment banking fees for the entire industry rose 11.5% sequentially in the second quarter of 2016, but remain 18% below last year’s take. A longer-term concern about Goldman revolves around the after-effects of the Brexit vote. Goldman and JPMorgan face the largest risks from Brexit due to their large U.K.-based operations.
Investment banking has shown barely a pulse this year. The number of U.S. initial public offerings (IPOs) is down by 58% compared with a year ago, and the dollar value of those IPOs is down by 57%, according to IPO ETF manager Renaissance Capital.
On December 31, 2015, Goldman’s shares closed at $180.23. On Friday the shares closed at $160.41, down 0.1% for the day and down about 1.8% for the week. The stock’s 52-week range is $138.20 to $208.13, and the consensus price target is $181.00. The high target is $222 and the low is $120.
Goldman is currently the third most heavily weighted stock among the Dow 30, at 5.92%. It has ceded its top weighting to 3M, which now carries a Dow weighting of 6.67%, earlier this year and now also trails IBM’s 5.93% weighting.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
