US Investment bank Goldman Sachs releases second-quarter earnings on Wednesday, and these are the levels to watch.
GS: Weekly Chart
The price of GS stock trades at $327.20 after finding some support below. The target for the stock is now between $340 and $360.
Analysts had low expectations for corporate profits through the end of this year, so there is potential for an upside surprise. Analysts expect Goldman Sachs and Morgan Stanley to both report another slowdown in profit this week with a continued slump in global dealmaking.
Analysts at JP Morgan reduced their earnings per share estimates for Goldman Sachs and Morgan Stanley on “lower IB revenues… with limited cost offset”. They also cut Goldman Sachs’s EPS for the full year by 14% and Morgan Stanley’s by 12%.
“We expect the focus of 2Q results for US IBs to be on the outlook for IB fees, planned cost measures in the event of continued revenue weakness, and the outlook for capital returns with Basel 3 finalisation uncertainty,” they said.
Last week’s results from Citi gave an early taste of what’s to come, with the bank seeing its profit fall 36% year on year as it was hit by the global decline in dealmaking. Revenue from corporate and investment banking fell 44% compared to last year, while revenue from its trading business also fell 13%.
Citi boss Jane Fraser said “the long-awaited rebound in investment banking has yet to materialise, making for a disappointing quarter.”
