Goldman Sachs Group, Inc. (GS) closed out fiscal 2025 on a somewhat awkward note, posting fourth-quarter results that were basically fine except for the part where they took a massive beating on their consumer banking experiment gone wrong.
The bank reported mixed Q4 results Thursday, weighed down by Platform Solutions losses stemming from $2.26 billion in markdowns related to transferring Apple Card loans to held-for-sale status, plus contract termination costs. It's the price you pay for getting out of a business that never quite fit—think of it as expensive tuition in the school of "maybe stick to what you're good at."
Net revenue slipped 3% year-over-year to $13.45 billion, missing the $13.79 billion consensus. But here's the twist: GAAP earnings actually climbed to $14.01 per share from $11.95 a year ago, sailing past the $11.65 estimate. So yes, they took their lumps on the consumer side, but the core business kept humming along nicely.
Why Analysts Are Bullish
Bank of America Securities analyst Ebrahim H. Poonawala isn't deterred by the quarterly messiness. He raised his price target to $1,100 from $1,050 while maintaining a Buy rating, and his reasoning makes sense: Goldman has been consistently crushing earnings expectations.
Poonawala notes that positive EPS revisions remain the primary driver of stock performance, with Goldman beating consensus EPS estimates by roughly 15% on average over the past four quarters. That's not luck—that's execution.
The analyst believes Goldman is well-positioned for potentially stronger-than-expected EPS growth in 2026, citing solid quarterly fundamentals, increased momentum in M&A and IPO activity, a more favorable regulatory environment, and management's focus on consistent growth and profitability.
The 2026 Outlook
For fiscal 2026, Poonawala projects 15% growth in investment banking and 3% in markets—estimates he actually considers conservative if no major macro shocks materialize. Strong demand from strategic and sponsor clients, supportive regulation, falling rates, and stable equity markets should all fuel deal activity, he argues.
Now, investment banking only contributes about 15% to total revenues, but here's the kicker: those deals generate ancillary revenue opportunities across financing, trading, and wealth management. It's the gift that keeps on giving.
The analyst raised his fiscal 2026 EPS estimates to $58.64 from $57.30 on slightly higher revenue growth projections, while keeping fiscal 2027 EPS unchanged at $67.30—which sits 8.1% above consensus.
Goldman Sachs shares were down 1.15% at $964.60 at publication time Friday, still trading near the stock's 52-week high of $981.25. Not bad for a bank that just wrote off a couple billion dollars trying to figure out consumer banking.
