Goldman Sachs (#GoldmanSachs) plans to release its financial results for the third quarter of 2021 this Friday, before the market opens on October 15.
In the last quarter, the investment bank reported net sales revenue of US$15.39 billion, a decrease of nearly -15% from the previous quarter, but a year-on-year increase of 15.7%. In general, asset management contributed the most to the bank’s revenue at US$5.13 billion (or 33%), followed by fixed-income clearing companies (FICC) and stocks (US$4.9 billion, or 32%), investment banks ($3.61 billion, or 24%) and Consumer and Wealth Management ($1.75 billion, or 11%).
Net profit was US$5.49 billion, a quarter-on-quarter decline of more than 24% but a year-on-year increase of more than 125%. Earnings per share (EPS) fell nearly 24% from the previous quarter to US$15.02, but remained unchanged compared to the same quarter in 2020 The annual growth rate is 140%. According to Mr. Sοlomon, the bank’s chairman and chief executive officer, the poor performance is due to the ongoing challenges faced by customers and the community. However, with the continued development of strategic priorities and the strengthening of franchise rights, as well as helping customers cope with the ever-changing environment, its net sales and profits and earnings per share have all set a record for the second highest in history.
Figure 1: Goldman Sachs reported sales and earnings per share and analyst forecasts. Source: https://money.cnn.com/quote/forecast/forecast.html?symb=GS
For the upcoming announcement, the general estimates of sales and earnings per share are US$11.7 billion and US$10.14, a quarter-on-quarter decline of 31.62% and 48.13% respectively, but a year-on-year increase of 8.33% and 4.75%. Nevertheless, 17 of the 28 investment analysts surveyed maintain a positive (buy) rating on Goldman Sachs. In addition to the record of establishing the highest profitability expectations, other reasons that may support the hawkish views of these analysts include post-pandemic “normalization” (that may eventually bring activities and businesses back on track), technological advancement (a better innovation platform in order to cater to different needs), andthe enhancement of product supply in new markets. Recently, Goldman Sachs acquired the Dutch-based asset management company NN Investment Partners and the financial technology platform GreenSky which may further provide long-term value for it in fund management, cross-retail and institutional channel distribution platforms, cross-selling, product and bank stability. On the downside, concerns, uncertainties and doubts about issues such as increasing price pressures and stagflation continue to plague the market, which may have an adverse effect on the bank.
Technical Analysis:
From a larger perspective, the #GoldmanSachs share price has been in a strong bullish trend since it found support in March 2020. Its price rebounded from a low of $130.60 and continued to rise until it hit a record high of $420.60 at the end of August this year, a cumulative increase of 222%.
From the daily chart, the head and shoulders price structure has yet to be confirmed (left shoulder – $390, top -$ 420). Therefore, $390 is the key resistance level. If the bullish breakout is successful, the next targets for attention will be $420 and $450. On the contrary, if the breakout is unsuccessful, and the head-and-shoulders pattern is confirmed, the support levels for attention will be $370, $350, and analysts’ low estimates of $330. It is also worth noting that the indicators are still unclear, which indicates that the current price trend requires a strong catalyst to get out of the current consolidation zone ($370-$390).
Click here to view the HotForex economic calendar
Larince Zhang
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
