As promised, earnings reports for the March quarter show up this week before markets open on Wednesday morning. The next six to eight weeks will see an avalanche of reported results, and we’ll be previewing some of the most closely followed issues as they roll onto our calendar.
Neither Monday nor Tuesday of this week has any reports of special note, but there are three big U.S. banks reporting before markets open Wednesday morning, along with one specialty retailer whose fourth quarter ended in February.
Goldman Sachs Group Inc. (NYSE: GS) has posted a 12-month share price gain of nearly 85%, virtually all of it since November. For the year to date, the shares are up about 27%. The bank’s outstanding performance during the pandemic is down to its trading desk and its dealmaking. Investors seeking higher returns trade more, and private companies looking to soak up some homeless cash through IPOs and mergers have been boosting Goldman Sachs profits. While markets are a bit cooler now, there is little reason to think the boom is over.
Analysts’ ratings on the stock are mixed, with 10 of 27 ratings of Buy or Strong Buy, compared to 15 Hold ratings and two at Underperform. The consensus price target on the stock is $368.11, and shares traded Monday at around $333.75, implying a potential 12-month upside of around 10.2%. At the high target of $468, the upside potential reaches 40%.
Goldman Sachs is expected to report first-quarter earnings per share (EPS) of $10.22 on revenue of $12.39 billion. In the first quarter of last year, the company reported EPS of $3.11 and revenue of $8.74 billion. Estimates for the second-quarter call for EPS of $8.16 and revenue of $10.74 billion, compared to year-ago EPS of $0.53 and revenue of $10.74 billion. For the 2021 fiscal year, analysts are forecasting EPS of $32.92 and revenue of $42.6 billion, a year-over-year increase of 33% in EPS, and a revenue decrease of 4.4%.
The stock currently traded at around 10.1 times expected 2021 EPS, 10.0 times estimated 2022 EPS and 9.3 times estimated 2023 earnings. The stock’s 52-week range is $165.36 to $356.85, and Goldman Sachs pays an annual dividend of $5.00 (yield of 1.51%).