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Goldman Shares Skyrocket to All-Time High: Here's What's Behind It
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Key Takeaways
The GS stock hit an all-time high after clearing the Fed's 2025 stress test, with a CET1 ratio of 12.3%.
Goldman has $43.6B in repurchase authorization and a 1.7% dividend yield.
GS trades at 14.99X forward P/E, above the industry average, with a solid earnings growth view.
The Goldman Sachs Group (GS - Free Report) shares hit an all-time high of $714.30 during yesterday’s trading session, after clearing the 2025 Federal Reserve’s stress test. Post-clearing the stress test, GS has the flexibility to return excess capital to shareholders via dividends and share repurchases.
The Fed's 2025 stress test scenario modelled a 10% unemployment rate, a 33% drop in home prices and a 50% equity market decline — a severe simulated recession. Aggregate simulated losses across the group totaled more than $550 billion; yet, banks remained well-capitalized with common equity tier 1 (CET1) ratios far above the 4.5% minimum.
Goldman’s projected CET1 capital ratio stood at a solid 12.3%. This indicates that the bank can withstand a severe recession with plenty of capital on hand to absorb hundreds of billions of dollars in losses.
At present, GS offers a 1.7% dividend yield. Goldman has a 28% payout ratio. In July 2024, following the release of 2024 stress test results, the company raised its quarterly dividend 9.1% to $3 per share. Given its strong capital position, we expect another dividend increase this year.
Additionally, Goldman has a share repurchase plan in place. In the first quarter of 2025, the board of directors approved a share repurchase program authorizing additional repurchases of up to $40 billion of common stock. In February 2023, it announced a share repurchase program, authorizing repurchases of up to $30 billion of common stock with no expiration date. At the end of the first quarter, GS had $43.6 billion worth of shares available under authorization.
As of March 31, 2025, cash and cash equivalents were $167 billion, and $71 billion were near-term borrowings. Given strong liquidity, GS will likely continue to reward its shareholders handsomely.
GS’ Peers Also Clear Fed Stress Test
Apart from GS, 21 banks, including JPMorgan (JPM - Free Report) and Bank of America (BAC - Free Report) , passed the 2025 Fed stress test.
JPMorgan’s projected CET1 capital ratio stood at a solid 14.2%, while Bank of America’s projected CET1 capital ratio stood at 10.2%, far above the 4.5% minimum required.
Currently, Bank of America offers a 2.20% dividend yield while JPMorgan has a dividend yield of 1.93%. After clearing the 2024 stress test, Bank of America raised its quarterly dividend by 8.3% to 26 cents per share. On the other hand, in March 2025, JPM raised its quarterly dividend by 12% to $1.40 per share after a 9% dividend hike in September 2024.
Further, after clearing the 2024 stress test, JPMorgan authorized a new share repurchase program of $30 billion. As of March 31, 2025, almost $11.7 billion in authorization remained available. Similarly, Bank of America authorized a $25-billion stock repurchase program, effective Aug. 1, 2024. As of March 31, 2025, authorization of $14.4 billion was available.
Given their strong capital position, both BAC and JPM’s capital distribution plans seem sustainable.
GS shares have gained 24.8% year to date compared with the industry’s growth of 19.2%.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 14.99X, above the industry’s average of 14.72X.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GS’s 2025 and 2026 earnings implies year-over-year rallies of 8.8% and 14.1%, respectively. The Zacks Consensus Estimate for GS’s 2025 and 2026 sales implies year-over-year increases of 3.3% and 5.9%, respectively. The earnings estimates for 2025 have been revised downward over the past 30 days, while the same for 2026 have been revised upward.
Image: Bigstock
Goldman Shares Skyrocket to All-Time High: Here's What's Behind It
Key Takeaways
The Goldman Sachs Group (GS - Free Report) shares hit an all-time high of $714.30 during yesterday’s trading session, after clearing the 2025 Federal Reserve’s stress test. Post-clearing the stress test, GS has the flexibility to return excess capital to shareholders via dividends and share repurchases.
The Fed's 2025 stress test scenario modelled a 10% unemployment rate, a 33% drop in home prices and a 50% equity market decline — a severe simulated recession. Aggregate simulated losses across the group totaled more than $550 billion; yet, banks remained well-capitalized with common equity tier 1 (CET1) ratios far above the 4.5% minimum.
Goldman’s projected CET1 capital ratio stood at a solid 12.3%. This indicates that the bank can withstand a severe recession with plenty of capital on hand to absorb hundreds of billions of dollars in losses.
At present, GS offers a 1.7% dividend yield. Goldman has a 28% payout ratio. In July 2024, following the release of 2024 stress test results, the company raised its quarterly dividend 9.1% to $3 per share. Given its strong capital position, we expect another dividend increase this year.
Additionally, Goldman has a share repurchase plan in place. In the first quarter of 2025, the board of directors approved a share repurchase program authorizing additional repurchases of up to $40 billion of common stock. In February 2023, it announced a share repurchase program, authorizing repurchases of up to $30 billion of common stock with no expiration date. At the end of the first quarter, GS had $43.6 billion worth of shares available under authorization.
As of March 31, 2025, cash and cash equivalents were $167 billion, and $71 billion were near-term borrowings. Given strong liquidity, GS will likely continue to reward its shareholders handsomely.
GS’ Peers Also Clear Fed Stress Test
Apart from GS, 21 banks, including JPMorgan (JPM - Free Report) and Bank of America (BAC - Free Report) , passed the 2025 Fed stress test.
JPMorgan’s projected CET1 capital ratio stood at a solid 14.2%, while Bank of America’s projected CET1 capital ratio stood at 10.2%, far above the 4.5% minimum required.
Currently, Bank of America offers a 2.20% dividend yield while JPMorgan has a dividend yield of 1.93%. After clearing the 2024 stress test, Bank of America raised its quarterly dividend by 8.3% to 26 cents per share. On the other hand, in March 2025, JPM raised its quarterly dividend by 12% to $1.40 per share after a 9% dividend hike in September 2024.
Further, after clearing the 2024 stress test, JPMorgan authorized a new share repurchase program of $30 billion. As of March 31, 2025, almost $11.7 billion in authorization remained available. Similarly, Bank of America authorized a $25-billion stock repurchase program, effective Aug. 1, 2024. As of March 31, 2025, authorization of $14.4 billion was available.
Given their strong capital position, both BAC and JPM’s capital distribution plans seem sustainable.
Goldman’s Price Performance, Valuation & Estimates
GS shares have gained 24.8% year to date compared with the industry’s growth of 19.2%.
Price Performance
From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 14.99X, above the industry’s average of 14.72X.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GS’s 2025 and 2026 earnings implies year-over-year rallies of 8.8% and 14.1%, respectively. The Zacks Consensus Estimate for GS’s 2025 and 2026 sales implies year-over-year increases of 3.3% and 5.9%, respectively. The earnings estimates for 2025 have been revised downward over the past 30 days, while the same for 2026 have been revised upward.
Estimates Revision Trend
Image Source: Zacks Investment Research
Goldman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.