Skip to Content

Goldman Sachs Group Inc GS

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat




Goldman Sachs’ Financials Restated for 1MDB Charge Within Expected Range; Shares Fairly Valued

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Narrow-moat Goldman Sachs released restated second-quarter financial statements for the 1MDB agreement with the Malaysian government, and we don’t anticipate making a material change to our $218 fair value estimate. The company increased its provisions for litigation and regulatory provisions by $2.01 billion, which reduced its net income to common shareholders to $197 million, or $0.53 per diluted share, from its previously reported $2.2 billion, or $6.26 per diluted share. We estimate that the company may have cumulatively provisioned around $4.5 billion related to 1MDB, though the agreement with the Malaysian government was for a $2.5 billion payment and came with a guarantee that at least $1.4 billion of proceeds from seized assets would be remitted to Malaysia. This means that Goldman Sachs may have already accrued several hundred million to over $1 billion for other settlements or regulatory fines related to 1MDB. Goldman Sachs also reduced its “reasonably possible aggregate loss” estimate for legal proceedings to $0.9 billion from $3.2 billion at the end of the first quarter of 2020, which reduces the potential size of legal charges in coming quarters. With the company’s market capitalization of $70 billion and $90 billion of shareholders’ equity, it should be able to absorb additional legal charges.

Read Full Analysis

Company Profile

Business Description

Goldman Sachs is a global investment banking firm whose activities are organized into investment banking (20% of net revenue), global markets (40% of net revenue), asset management (25% of net revenue), and consumer and wealth management (15% of net revenue) segments. Approximately 60% of the company's net revenue is generated in the Americas, 15% in Asia, and 25% in Europe, the Middle East, and Africa. In 2008, Goldman reorganized itself as a financial holding company regulated by the Federal Reserve System.

200 West Street
New York, NY, 10282
T +1 212 902-1000
Sector Financial Services
Industry Capital Markets
Most Recent Earnings Mar 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 38,300