Despite Earnings Beat, Are There Growth Concerns at Goldman Sachs?

Banking, finance, and taxes

Published: July 16, 2019 8:35 am

Last Updated: January 30, 2020 6:34 pm

Goldman Sachs Group Inc. (NYSE: GS) reported its most recent quarterly results before the markets opened on Tuesday. The investment house said that it had $5.81 in earnings per share (EPS) and $9.46 billion in revenue. That compares with consensus estimates of $4.89 in EPS and $8.83 billion in revenue, as well as the $5.98 per share and $9.4 billion posted in the same period of last year.

During the latest quarter, equities net revenues were $2.01 billion, the second-highest quarterly performance in four years. Assets under supervision increased $61 billion during the quarter to a record $1.66 trillion.

Book value per common share was $214.10, and tangible book value per common share was $203.05, both 2.4% higher compared with the end of the first quarter of 2019.

In terms of its segments, the firm reported as follows:

Investment Banking revenues decreased 9% year over year to $1.86 billion.
Institutional Client Services revenues decreased by 3% to $3.48 billion.
Investing & Lending revenues increased by 16% to $2.53 billion.
Investment Management decreased 14% to $1.59 billion.

David Solomon, board chair and chief executive, commented:

We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients. Given the strength of our client franchise, we are well positioned to benefit from a growing global economy. And, our financial strength positions us to return capital to shareholders, including a significant increase in our quarterly dividend in the third quarter.

Shares of Goldman Sachs closed Monday at $211.58, in a 52-week range of $151.70 to $245.08. The consensus price target is $231.38. Following the announcement, the stock was up about 1% at $214.16 in early trading indications Tuesday.