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GS Sees M&A Momentum to Continue in 2026: Implications for Its IB Fees
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Key Takeaways
Goldman reported $3.37B in M&A advisory fees in the first nine months of 2025, reflecting higher deal volumes.
GS equity and debt underwriting fees rose 7% and 11% in YTD 2025, adding support to overall IB revenue growth.
GS management expects improved financing conditions to accelerate delayed M&A and capital-raising
The Goldman Sachs Group’s (GS - Free Report) chief financial officer, Denis Coleman, affirmed its strong confidence in global mergers and acquisitions (M&A) at the firm’s 2025 Global Conference held on Dec 9. The company is projecting that the momentum seen in 2025 will continue into 2026 — a development that has significant implications for its investment banking (IB) business.
In 2025, Goldman’s M&A team has advised on an exceptionally robust pipeline of deals, with 2025 on track to become one of the biggest years for announced M&A on record. Year to date, Goldman has advised on $1.1 trillion in M&A volume. This commanding lead translated directly into higher advisory revenues. In the first nine months of 2025, Goldman’s M&A advisory fees rose 31% y/y to $3.37 billion. Equity and debt underwriting also grew 7% and 11%, respectively, supporting a 19% year-over-year increase in overall IB fees.
Dealmaking has gathered pace, given a resilient economy, lower financing costs, and renewed corporate confidence, driving more activity. Expectations for a more business-friendly policy environment under the Trump administration, particularly around antitrust review timelines and cross-border approvals, have further strengthened management confidence to pursue larger, strategic deals. Simultaneously, a surge of major IPOs in 2025 fueled renewed investor optimism, as companies capitalized on improving market conditions to go public and raise capital.
"The overall outlook and expectation for the equity underwriting calendar remains very positive, and we should continue to see good levels of activity in 2026," Coleman stated at the conference.
Adding to these tailwinds, the Federal Reserve’s third consecutive 25-basis-point rate cut this year has improved financing conditions and boosted market confidence. Lower borrowing costs are likely to accelerate deal execution by encouraging companies to revive postponed M&A and capital-raising plans.
Overall, a growing M&A deals, a rising IPO pipeline, a strong advisory backlog and Goldman’s leadership position will enable it to sustain solid IB performance, going forward.
How GS Competes With JPM & MS in IB Business
Similar to Morgan Stanley, other major IB firms like JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) will likely benefit from this continued M&A momentum and macro tailwinds.
In the first nine months of 2025, JPMorgan’s IB fees rose 12.3% year over year to $7.3 billion, driven by improvements in advisory and underwriting businesses. Jeremy Barnum, executive VP and chief financial officer of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment.
Riding a wave of deal-making and initial public offering activity, Morgan Stanley's IB revenues reached $5.2 billion in the first nine months of 2025, up 15% year over year. On the third-quarter 2025 call, Morgan Stanley CEO Ted Pick said the improving environment supported strategic M&As and renewed financing activity. While being cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen”, he noted that IB activity should continue to rise over the next couple of years.
GS shares have gained 51.4% in the past year compared with the industry’s growth of 33.3%.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 16.3X, above the industry’s average of 15.1X.
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 20.6% and 12.2%, respectively. Likewise, the Zacks Consensus Estimate for GS’s 2025 and 2026 sales suggests year-over-year increases of 10.7% and 5.9%, respectively. Estimates for both years have been revised upward over the past 60 days.
Image: Bigstock
GS Sees M&A Momentum to Continue in 2026: Implications for Its IB Fees
Key Takeaways
The Goldman Sachs Group’s (GS - Free Report) chief financial officer, Denis Coleman, affirmed its strong confidence in global mergers and acquisitions (M&A) at the firm’s 2025 Global Conference held on Dec 9. The company is projecting that the momentum seen in 2025 will continue into 2026 — a development that has significant implications for its investment banking (IB) business.
In 2025, Goldman’s M&A team has advised on an exceptionally robust pipeline of deals, with 2025 on track to become one of the biggest years for announced M&A on record. Year to date, Goldman has advised on $1.1 trillion in M&A volume. This commanding lead translated directly into higher advisory revenues. In the first nine months of 2025, Goldman’s M&A advisory fees rose 31% y/y to $3.37 billion. Equity and debt underwriting also grew 7% and 11%, respectively, supporting a 19% year-over-year increase in overall IB fees.
Dealmaking has gathered pace, given a resilient economy, lower financing costs, and renewed corporate confidence, driving more activity. Expectations for a more business-friendly policy environment under the Trump administration, particularly around antitrust review timelines and cross-border approvals, have further strengthened management confidence to pursue larger, strategic deals. Simultaneously, a surge of major IPOs in 2025 fueled renewed investor optimism, as companies capitalized on improving market conditions to go public and raise capital.
"The overall outlook and expectation for the equity underwriting calendar remains very positive, and we should continue to see good levels of activity in 2026," Coleman stated at the conference.
Adding to these tailwinds, the Federal Reserve’s third consecutive 25-basis-point rate cut this year has improved financing conditions and boosted market confidence. Lower borrowing costs are likely to accelerate deal execution by encouraging companies to revive postponed M&A and capital-raising plans.
Overall, a growing M&A deals, a rising IPO pipeline, a strong advisory backlog and Goldman’s leadership position will enable it to sustain solid IB performance, going forward.
How GS Competes With JPM & MS in IB Business
Similar to Morgan Stanley, other major IB firms like JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) will likely benefit from this continued M&A momentum and macro tailwinds.
In the first nine months of 2025, JPMorgan’s IB fees rose 12.3% year over year to $7.3 billion, driven by improvements in advisory and underwriting businesses. Jeremy Barnum, executive VP and chief financial officer of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment.
Riding a wave of deal-making and initial public offering activity, Morgan Stanley's IB revenues reached $5.2 billion in the first nine months of 2025, up 15% year over year. On the third-quarter 2025 call, Morgan Stanley CEO Ted Pick said the improving environment supported strategic M&As and renewed financing activity. While being cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen”, he noted that IB activity should continue to rise over the next couple of years.
Goldman’s Price Performance, Valuation & Estimates
GS shares have gained 51.4% in the past year compared with the industry’s growth of 33.3%.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 16.3X, above the industry’s average of 15.1X.
Price-to-Earnings F12M
The Zacks Consensus Estimate for GS’s 2025 and 2026 earnings implies year-over-year rallies of 20.6% and 12.2%, respectively. Likewise, the Zacks Consensus Estimate for GS’s 2025 and 2026 sales suggests year-over-year increases of 10.7% and 5.9%, respectively. Estimates for both years have been revised upward over the past 60 days.
Estimate 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.