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Goldman Sachs (GS) Outpaces Stock Market Gains: What You Should Know

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Goldman Sachs (GS - Free Report) closed at $226.97 in the latest trading session, marking a +0.71% move from the prior day. This change outpaced the S&P 500's 0.65% gain on the day. Meanwhile, the Dow gained 0.79%, and the Nasdaq, a tech-heavy index, added 1.01%.

Coming into today, shares of the investment bank had lost 1.06% in the past month. In that same time, the Finance sector lost 4.88%, while the S&P 500 lost 6.82%.

Investors will be hoping for strength from GS as it approaches its next earnings release, which is expected to be January 16, 2019. In that report, analysts expect GS to post earnings of $6.23 per share. This would mark year-over-year growth of 9.68%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.26 billion, up 5.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $25.43 per share and revenue of $36.41 billion. These totals would mark changes of +28.69% and +13.53%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for GS. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.99% higher. GS is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that GS has a Forward P/E ratio of 8.86 right now. Its industry sports an average Forward P/E of 12.52, so we one might conclude that GS is trading at a discount comparatively.

It is also worth noting that GS currently has a PEG ratio of 0.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial - Investment Bank industry currently had an average PEG ratio of 0.79 as of yesterday's close.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 89, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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