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KRAKOW, POLAND—(BUSINESS WIRE)—(BUSINESS WIRE)—(BUSINESS WIRE)—(BUSINESS W The Goldman Sachs logo is displayed… [+] on an Android phone in this photo illustration. (Image courtesy of Omar Marques/SOPA Images/LightRocket via Getty Images)
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On Tuesday, July 13, Goldman Sachs (NYSE: GS) will release its fiscal Q2 2021 results. We predict Goldman Sachs to beat the consensus revenue and earnings expectations. In the first quarter of 2021, the bank surpassed the consensus estimates by a large margin. This was primarily due to a year-over-year increase in investment banking and sales & trading revenues, followed by good growth in the asset management business. The same trend is expected to continue in the second quarter of FY2021. According to our estimates, Goldman Sachs is worth roughly $385 per share, which is 5% higher than the current market price of $368. For additional information, see our interactive dashboard analysis of Goldman Sachs’ pre-earnings: What To Expect in Q2?
(1) In the second quarter, revenues are predicted to be somewhat higher than the consensus forecast.
Goldman Sachs’ fiscal Q2 2021 revenues are expected to be about $11.98 billion, slightly higher than the $11.79 billion consensus forecast, according to Trefis. In 2020, GS’s top line increased by 22% to $44.6 billion, owing mostly to an increase in sales and trading and investment banking income. The expansion was aided by an increase in wealth and consumer banking earnings. Asset management, on the other hand, was the only division that had a bad year. While investment banking and sales & trading businesses continued to rise in the first quarter of 2021, asset management saw exceptional growth, thanks to record revenues in the Equity investments sub-segment. The similar trend is expected to continue in the second quarter of FY2021.
Trading volumes and underwriting transaction volumes, respectively, are tied to sales & trading and investment banking income, which have witnessed an extraordinary increase in recent quarters. However, we anticipate that both will return to normal in the next months. The wealth management and asset management companies, on the other hand, are likely to continue growing this year. In FY2021, the company’s revenues are expected to reach $49.8 billion. More information about Goldman Sachs’ segments can be found in our revenue dashboard.
2) Earnings per share are expected to exceed consensus projections.
According to Trefis analysis, Goldman Sachs’ adjusted earnings per share for the second quarter of 2021 will be $9.58, slightly higher than the consensus expectation of $9.45. Because of increasing revenues and decreased operating expenses as a percentage of revenues, GS’ profitability improved in 2020. In 2020, however, the corporation boosted its credit loss reserves to compensate for the increasing risk of loan defaults. Despite the fact that the bank’s loan portfolio is not as large as its competitors’, the provisioning has had a detrimental impact on its profits. Notably, the company has reduced its provisions in recent quarters, implying that its clients’ loan repayment capacity has improved. The same pattern persisted in the first quarter of 2021, and it is projected to continue in the second quarter.
ADDITIONAL INFORMATION FOR YOU
The net income margin at Goldman Sachs is expected to rise this year. In FY2021, it will improve Goldman’s EPS to $44.02.
(3) Estimated stock price is 5% higher than current market pricing.
With an EPS forecast of roughly $44.02 and a P/E ratio of little under 9x in fiscal 2021, our Goldman Sachs valuation equates to a price of $385, which is 5% higher than the current market price of $368.

P/E Multiples are calculated using the share price at the end of the year and the reported (or predicted) Adjusted Earnings for the entire year.
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