More bad news for Goldman Sachs ahead of Q1 earnings

Goldman Sachs GS stock price is underperforming its rivals this year. The stock is up by just 3.89% this year while the benchmark S&P 500 index has risen by less than 10% in 2024.

Goldman Sachs stock is trailing peers

In contrast, JPMorgan’s shares have soared by over 14.9% this year while Citigroup and Wells Fargo have risen by 17% and 15.68%. Only Morgan Stanley is doing worse as it has crashed by 1.72%.

Goldman’s stock has also lagged the market in the past 12 months. It has risen by over 23.3% in this period. At the same time, JP Morgan’s shares have jumped by over 52% while Wells Fargo is up by 47%.

Goldman Sachs’ stock price has underperformed because of the weakness in investment banking and the challenges in its retail banking business. The other banks have vast operations in consumer banking and wealth management.

Goldman Sachs vs MS, JPM, C, and MS

High turnover in the company

Goldman Sachs has also trailed the market because of increased employee turnover. The latest departure is Philip Berlinksi, who has been in the company for over 24 years. He will now become the Chief Operating Officer (COO) at Millenium, a $65 billion hedge fund.

Philip joins other senior officials who have abandoned Goldman Sachs in the past few months. It recently lost Jim Esposito, the head of its investment banking and trading business.

Similarly, Beth Hammack, the co-head of the Global Financing Group was widely expected to become the next chief financial officer (CFO). 

Goldman Sachs has lost tens of top officials, including Paul Russo, Scott Rofey, and Jeffrey Verschleiser. Most of these departures happened under David Solomon, who has become a controversial leader in the company.

Goldman Sachs earnings ahead

Looking ahead, the next important catalyst for the Goldman Sachs stock will be the company’s earnings scheduled for Monday. Analysts expect that its revenues rose to $12.93 billion in the last quarter while the GAAP earnings per share rose to $8.68. 

According to another estimate by Yahoo Finance, The average estimate of 12 analysts is that its revenue will be $12.9 billion. For the year, analysts expect that its revenue will be $50.2 billion, up from $45 billion in 2023.

There are signs that the company’s investment banking division is improving. Data by Dealogic shows that it has been the best M&A bank this year as it handled deals worth $285 billion, up from $142 billion a year earlier.

Its Equity Capital Markets (ECM) deals rose from $11.2 billion in 2023 to $15.7 billion this year Its investment banking revenue is estimated to be $1.6 billion, up from $1.31 billion in 2023. The company is also aiming to grow its private credit portfolio to $300 billion.