- Goldman Sachs’ 3Q net revenue stands at $11.82 billion, a decrease of 1.3% year on year (y/y).
- The company’s FICC (Fixed Income, Currency and Commodities) sales & trading revenue beat estimates, coming in at $3.38 billion.
- Global Banking & Markets net revenues were $8.01 billion, surpassing the estimated $7.06 billion.
- Investment banking revenue was $1.56 billion, slightly higher than the estimated $1.54 billion.
- Equities sales & trading revenue also exceeded estimates at $2.96 billion.
- Advisory revenue was $831 million, higher than the estimated $730.7 million.
- Equity underwriting revenue was $308 million, less than the estimated $352.2 million.
- Debt underwriting revenue came in at $415 million, lower than the estimated $460.1 million.
- Net interest income was $1.55 billion, a decrease of 24% y/y, and lower than the estimated $1.86 billion.
- Goldman Sachs reported a pretax loss of $607 million in Platform Solutions, higher than the estimated loss of $409.9 million.
- Total deposits stand at $403 billion, an increase of 1% quarter on quarter (q/q).
- The provision for credit losses was significantly lower at $7 million, a 99% decrease y/y.
- Total operating expenses increased by 18% y/y, reaching $9.05 billion, and exceeding the estimated $7.76 billion.
- Compensation expenses also rose by 16% y/y to $4.19 billion.
- Annualized Return on Equity (ROE) was slightly lower than expected at 7.1%.
- Return on tangible equity was 7.7%, less than the estimated 8.07%.
- Standardized CET1 ratio is 14.8%, slightly higher than the estimated 14.7%.
- Book value per share is now $313.83, compared to $308.22 in the previous year.
- The efficiency ratio is higher than expected at 76.6%.
- Total AUS net inflows were $18 billion, a decrease of 33% y/y, and less than the estimated $24.38 billion.
- Loans stand at $178 billion, a slight increase of 0.6% y/y, but less than the estimated $179.68 billion.
Goldman Sachs Group on Smartkarma
The Goldman Sachs Group has recently been the subject of an analyst coverage on Smartkarma, an independent investment research network. Daniel Tabbush, a leading independent analyst, published a research report on the company, which highlighted two quarters of falling net interest income, topping out fees, very high costs, and worsening credit metrics in consumer banking. The report also raised concerns about Commercial Real Estate exposures, suggesting that the market cap gains over the past three years may have been overdone.
The quarterly figures presented in the report are not encouraging, with net interest income growth continuing to decline. Furthermore, Tabbush suggests that fees appear to be topping out, while operating costs remain at very high levels. In addition, a 7 August letter from Senator Warren highlights the congressional scrutiny that the Goldman Sachs Group is currently under.
A look at Goldman Sachs Group Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
The Goldman Sachs Group, Inc., a leading global investment banking and securities firm, has recently been evaluated using the Smartkarma Smart Scores system. The system uses a 1-5 score for the company indicating its overall outlook, with 5 being the highest. According to the assessment, Goldman Sachs Group scored 4 for value, 3 for dividend, 4 for growth, 2 for resilience and 4 for momentum.
This overall score indicates that Goldman Sachs Group is a strong investment for the long-term, with a focus on value, growth and momentum. The company’s focus on providing services to corporations, financial institutions, governments and high-net worth individuals makes it a strong and reliable choice for investors.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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