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Goldman Sachs (GS) Gains But Lags Market: What You Should Know

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Goldman Sachs (GS - Free Report) closed at $209.59 in the latest trading session, marking a +1.59% move from the prior day. This change lagged the S&P 500's 1.9% gain on the day. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 1.75%.

Wall Street will be looking for positivity from GS as it approaches its next earnings report date. This is expected to be July 15, 2020. On that day, GS is projected to report earnings of $3.14 per share, which would represent a year-over-year decline of 45.96%. Our most recent consensus estimate is calling for quarterly revenue of $8.55 billion, down 9.68% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.81 per share and revenue of $34.12 billion, which would represent changes of -34.33% and -6.65%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for GS. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.48% higher. GS is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, GS is currently trading at a Forward P/E ratio of 14.94. This represents a discount compared to its industry's average Forward P/E of 14.99.

Also, we should mention that GS has a PEG ratio of 6.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial - Investment Bank was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Financial - Investment Bank industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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