Earnings Beat: The Goldman Sachs Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

The Goldman Sachs Group, Inc. (NYSE:GS) just released its quarterly report and things are looking bullish. The company beat forecasts, with revenue of US$14b, some 9.9% above estimates, and statutory earnings per share (EPS) coming in at US$11.58, 33% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Goldman Sachs Group

Following the latest results, Goldman Sachs Group's 18 analysts are now forecasting revenues of US$51.1b in 2024. This would be a meaningful 9.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 43% to US$36.40. Before this earnings report, the analysts had been forecasting revenues of US$50.2b and earnings per share (EPS) of US$33.87 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$439, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Goldman Sachs Group at US$493 per share, while the most bearish prices it at US$355. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Goldman Sachs Group's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Goldman Sachs Group to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Goldman Sachs Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$439, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Goldman Sachs Group analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Goldman Sachs Group that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.