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The Goldman Sachs Group Inc GS

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Stock XNYS Rating as of
$499.03 +7.32 (1.49%)
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Company Report

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Goldman Sachs: Increasing Our Fair Value Estimate to $460

Michael Wong

We are increasing our fair value estimate for narrow-moat-rated Goldman Sachs to $460 from $417 per share. This is about 12 times forward earnings and 1.5 times tangible book value. Of the net $43 increase in our fair value estimate, about $9 is from earnings since our previous valuation update, $26 is from decreasing the cost of equity we use in our model to 9.5% from 10%, $13 is from increasing our forecast long-term operating margin by around 1 percentage point, and $3 is from other miscellaneous positive adjustments that were partially offset by an $8 decrease from changes in our required regulatory capital assumption.

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Price vs Fair Value

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GS is trading at a 87% premium.
Price
$499.03
Fair Value
$838.00
Uncertainty
Medium
1-Star Price
$827.00
5-Star Price
$181.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

More stable investment management and net interest income could cause investors to reassess Goldman's earnings quality and increase their willingness to pay a premium for it.

Bears

While Goldman is in a better capital position than it was and has a shifting business mix, it may take a while for the market to give the company full credit for the changes. The company's strategy has also been somewhat muddied by recent acquisitions and divestitures.

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Trading Information

Previous Close Price
$491.71
Day Range
$495.65–504.00
52-Week Range
$289.36–509.48
Bid/Ask
$498.10 / $499.90
Market Cap
$160.92 Bil
Volume/Avg
2.2 Mil / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
18.22
Price/Sales
3.34
Dividend Yield (Trailing)
2.20%
Dividend Yield (Forward)
2.40%
Total Yield
5.16%

Company Profile

Goldman Sachs is a leading global investment banking and asset management firm. Approximately 20% of its revenue comes from investment banking, 45% from trading, 20% from asset management and 15% from wealth management and retail financial services. Around 60% of the company's net revenue is generated in the Americas, 15% in Asia, and 25% in Europe, the Middle East, and Africa.
Sector
Financial Services
Industry
Capital Markets
Stock Style Box
Large Value
Total Number of Employees
45,300
Website
https://www.goldmansachs.com

Competitors

Valuation

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Metric
GS
MS
BAC
Price/Earnings (Normalized)
 18.2217.1413.96
Price/Book Value
 1.541.861.21
Price/Sales
 3.343.193.39
Price/Cash Flow
 10.2010.859.04
Price/Earnings
GS
MS
BAC

Financial Strength

Metric
GS
MS
BAC
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 ———
Quick Ratio
No chart available

Profitability

Metric
GS
MS
BAC
Return on Assets (Normalized)
 0.80%1.02%0.92%
Return on Equity (Normalized)
 12.72%13.37%11.28%
Return on Invested Capital (Normalized)
 ———
Return on Assets
GS
MS
BAC
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