POLAND – 2020/07/16: In this photo illustration a multiple exposure image shows a Goldman Sachs logo … [+] displayed on a smartphone with stock market percentages on the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images

Goldman Sachs
GS
is scheduled to report earnings before Friday’s open. The stock hit a record high of $420.76/share in 2021 and is trading near $386/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview:

Goldman Sachs is expected to earn $9.78/share on $11.52 billion in revenue. Meanwhile, the so-called Whisper number is $12.34/share. The Whisper number is the Street’s unofficial view on earnings.

Charts Courtesy of MarketSmith Incorporated
Charts Courtesy of MarketSmith Incorporated

A Closer Look At The Fundamentals:

Fundamentally, the company is doing very well and earnings are expected to grow its earnings over 60% in 2021 vs 2020. That is very impressive considering how large Goldman Sachs is. It is one thing for a small or mid cap stock to grow by over 60% in one year but when a large cap company manages to grow its earnings by over 60% that is very impressive.

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A Closer Look At The Chart:

Technically, the stock is acting great and is trading just below its record high. The stock has had a huge run since the March 2020 low and is building a new base right now as it pauses to digest its latest run. It is very healthy to see a stock pause and digest a big move and so far the action remains healthy.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news.

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