What Are Analysts Expecting From The Goldman Sachs Group, Inc. (NYSE:GS) In The Years Ahead?

Daryl Painter

The Goldman Sachs Group, Inc.’s (NYSE:GS) most recent earnings update in December 2018 confirmed that the business benefited from a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts predict Goldman Sachs Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Goldman Sachs Group

Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.

Analysts’ outlook for next year seems pessimistic, with earnings declining by -6.2%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -3.8% in 2021, eventually reaching US$9.5b in 2022.

NYSE:GS Future Profit January 19th 19
NYSE:GS Future Profit January 19th 19

While it is helpful to be aware of the rate of growth year by year relative to today’s figure, it may be more insightful to analyze the rate at which the company is rising or falling every year, on average. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Goldman Sachs Group’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -0.7%. This means that, we can anticipate Goldman Sachs Group will chip away at a rate of -0.7% every year for the next couple of years.

Next Steps:

For Goldman Sachs Group, I’ve put together three pertinent aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  2. Valuation: What is GS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GS is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.