David Solomon, chief executive officer of Goldman Sachs Group Inc., on the Goldman Sachs Financial Services Conference in Recent York, Dec. 6, 2022.
Michael Nagle | Bloomberg | Getty Images
Goldman Sachs is scheduled to report third-quarter earnings before the opening bell Tuesday.
Here’s what Wall Street expects:
- Earnings: $5.31 a share, based on LSEG, formerly often known as Refinitiv
- Revenue: $11.19 billion
- Trading revenue: fixed income $2.8 billion, equities $2.73 billion, per StreetAccount
- Investment banking revenue: $1.48 billion
Is Wall Street deal-making on the mend?
Amongst its big bank peers, Goldman Sachs is probably the most reliant on investment banking and trading revenue.
While it’s made efforts under CEO David Solomon to diversify its revenue stream, first in an ill-fated retail banking push and later because it emphasized growth in asset and wealth management, it’s Wall Street that powers the corporate. Last quarter, trading and advisory accounted for two-thirds of Goldman’s revenue.
That is been a headwind as mergers, initial public offerings and debt issuance all have been muted this yr because the Federal Reserve boosted rates of interest to slow the economy down. With signs that activity has picked up recently, analysts can be desperate to hear about Goldman’s pipeline of deals.
At the identical time, Goldman has taken hits from two areas: Its strategic retrenchment away from retail banking has saddled the firm with losses because it finds buyers for unwanted operations, and its exposure to business real estate has resulted in write-downs as well.
Last week, Goldman said that its sale of lending business GreenSky will lead to a 19 cents per share hit to third-quarter results.
Analysts can be keen to listen to Solomon’s view on the investment banking outlook, in addition to how the remaining parts of its consumer effort — mainly, its Apple Card business — slot in the most recent iteration of Goldman Sachs.
Goldman shares have dropped 8.4% this yr through Monday, a greater showing than the 21% decline of the KBW Bank Index.
Last week, JPMorgan, Wells Fargo and Citigroup each topped expectations for third-quarter profit, helped by better-than-expected credit costs. Morgan Stanley posts results Wednesday.
This story is developing. Please check back for updates.