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Goldman Posts Solid Growth in Q3 IB Fees: Will the Trend Continue?

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Key Takeaways

  • Investment banking revenues at Goldman rose 42.5% y/y to $2.7B in the third quarter of 2025.
  • Advisory revenues surged 60%, while debt and equity underwriting grew 30% and 21%, respectively.
  • Goldman ended Q3 as the leader in announced and completed mergers and acquisitions.

The Goldman Sachs Group, Inc. (GS - Free Report) reported double-digit growth in its investment banking (IB) revenues in the third quarter of 2025. 

Global mergers and acquisitions (M&As) in the quarter were impressive, rebounding from the lows witnessed in April and May following President Donald Trump’s announcement of sweeping tariffs. Nonetheless, deal-making activities have picked up pace since then as corporates adapted to the rapidly evolving geopolitical and macroeconomic scenarios. They took advantage of a strong U.S. economy, optimism over potential Federal Reserve interest rate cuts, and a more accommodating regulatory environment under Trump.

Driven by higher advisory revenues, signifying a substantial rise in M&A volumes, GS’s IB fee revenues totaled $2.7 billion in the third quarter of 2025, up 42.5% from the prior-year quarter. Specifically, advisory revenues surged 60% year over year, while debt underwriting revenues moved up 30% and equity underwriting revenues grew 21%. Additionally, Goldman ended the third quarter as the leader in both announced and completed M&A, having advised on more than $1 trillion in announced M&A volumes year to date. 

During the third-quarter earnings call, David Solomon, chairman and CEO of Goldman, highlighted improvements in M&A activity throughout the year and expects the constructive environment to persist through the end of 2025, with even stronger M&A activity anticipated in 2026 amid a favorable backdrop.

Overall, the combination of favorable macro conditions, strong client pipelines, and GS's sustained leadership in the M&A advisory will continue to support its IB performance in the upcoming period.

How GS Competes With Peers in Terms of IB Business

Similar to Goldman, its peers Morgan Stanley (MS - Free Report) and JPMorgan (JPM - Free Report) witnessed solid growth in their IB revenues in the third quarter.

Riding on a frenzy of deal-making activities and IPOs, Morgan Stanley's IB revenues were $2.1 billion in the third quarter of 2025, up 44.1% from the prior-year quarter. Its fixed income underwriting fees rallied 39%, while equity underwriting income surged 80% year over year. Morgan Stanley’s advisory fees jumped 25% year over year to $684 million as completed M&As rose. 

During the third-quarter earnings call, Ted Pick, chairman and CEO of Morgan Stanley, said that the rebound in the operating environment enabled M&A and renewed financing activity. While he remained cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen,” he affirmed that IB activity should trend upward over the next couple of years. 

JPMorgan’s IB fees stood at $2.6 billion in the third quarter, implying 17.1% year-over-year growth. Specifically, JPM’s advisory fees rose 9%, with debt and equity underwriting fees growing 53% and 9%, respectively.

During the third-quarter earnings call, Jeremy Barnum, executive VP and chief financial officer of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment.

Goldman’s Price Performance, Valuation & Estimates

GS shares have gained 34.6% year to date compared with the industry’s growth of 28.7%.

Price Performance

 

Zacks Investment Research
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From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 14.33X, below the industry’s average of 14.38X.

Price-to-Earnings F12M

 

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The Zacks Consensus Estimate for Goldman’s 2025 and 2026 earnings implies a year-over-year rise of 19.6% and 12.4%, respectively. Likewise, the consensus estimate for the company’s 2025 and 2026 sales implies year-over-year rallies of 9.1% and 5.9%, respectively. Earnings estimates for both years have been revised upward over the past seven days.

Estimate Revision Trend

 

Zacks Investment Research
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Goldman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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