Goldman Sachs will report its third-quarter results before the opening bell on Tuesday.
Here’s what Wall Street is expecting:
Earnings: $5.31 per share, according to LSEG, formerly known as Refinitiv
Revenue: $11.19 billion
Trading revenue: $2.8bn in fixed income, $2.73bn in equities, according to StreetAccount
Investment banking revenue: $1.48bn
Is Wall Street deal-making on the mend?
Among its big bank peers, Goldman Sachs is the most dependent on investment banking and trading revenues.
While it has made efforts under CEO David Solomon to diversify its revenue streams, first with an ill-fated push into retail banking and later by emphasising growth in asset and wealth management, it’s Wall Street that drives the firm. Last quarter, two-thirds of Goldman’s revenue came from trading and advisory.
That’s been a headwind as mergers, IPOs and debt issuance have been muted this year as the Federal Reserve has raised interest rates to slow the economy. With signs that activity has picked up recently, analysts will be eager to hear about Goldman’s deal pipeline.
At the same time, Goldman has taken hits in two areas: Its strategic retreat from retail banking has saddled it with losses as it finds buyers for unwanted businesses, and its exposure to commercial real estate has also led to writedowns.
Last week, Goldman said the sale of its GreenSky lending business would result in a 19 cent per share hit to its third-quarter results.
Analysts will be keen to hear Solomon’s view on the outlook for the investment bank, as well as how the remaining parts of its consumer efforts – notably the Apple Card business – fit into the latest iteration of Goldman Sachs.
Goldman shares are down 8.4% this year through Monday, outperforming the 21% decline in the KBW Bank Index.
Last week, JPMorgan, Wells Fargo and Citigroup all beat third-quarter profit expectations, helped by better-than-expected credit costs. Morgan Stanley
