The Goldman Sachs Group Inc. (GS) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

The Goldman Sachs Group Inc. (NYSE: GS) stock fell -0.39% on Friday to $331.87 against a previous-day closing price of $333.17. With 1.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.54 million shares. During the session, the Capital Markets company that operates in wider Financial sector, reached to the highest price of $334.30 whereas the lowest price it dropped to was $330.62. The 52-week range on GS shows that it touched its highest point at $426.16 and its lowest point at $277.84 during that stretch. It currently has a 1-year price target of $394.53. With its current market cap of 110.95 billion, GS has annualized dividend of $10.00 while the current yield stands at 3.01%. Beta for the stock currently stands at 1.39.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GS was up-trending over the past week, with a rise of 0.84%, but this was up by 12.97% over a month. Three-month performance surged to 2.39% while six-month performance fell -8.59%. The stock lost -12.17% in the past year, while it has lost -13.25% so far this year. A look at the trailing 12-month EPS for GS yields 44.23 with Next year EPS estimates of 38.56. For the next quarter, that number is 8.05. This implies an EPS growth rate of 140.30% for this year and 10.63% for next year. EPS is expected to decline by -6.59% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 29.60%.

Float and Shares Shorts:

At present, 351.20 million GS shares are outstanding with a float of 341.54 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.02 million, which was 1.46% higher than short shares on Jun 14, 2022. In addition to Mr. David Solomon as the firm’s Chairman & CEO, Mr. John E. Waldron serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 70.93% of GS’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.53% of GS, in contrast to 38.31% held by mutual funds. Shares owned by individuals account for 32.67%. As the largest shareholder in GS with 8.51% of the stake, The Vanguard Group, Inc. holds 29,222,736 shares worth 29,222,736. A second-largest stockholder of GS, SSgA Funds Management, Inc., holds 21,729,009 shares, controlling over 6.33% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in GS, holding 15,795,399 shares or 4.60% stake. With a 2.82% stake in GS, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 9,688,746 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.14% of GS stock, is the second-largest Mutual Fund holder. It holds 7,361,983 shares valued at 2.19 billion. SPDR Dow Jones Industrial Average holds 1.65% of the stake in GS, owning 5,666,685 shares worth 1.68 billion.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. It generated $2.93B net income for the quarter, which came to $16.18B over the last twelve months.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GS since 28 analysts follow the stock currently. There are 15 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With GS analysts setting a high price target of $483.00 and a low target of $308.35, the average target price over the next 12 months is $389.37. Based on these targets, GS could surge 45.54% to reach the target high and fall by -7.09% to reach the target low. Reaching the average price target will result in a growth of 17.33% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. GS will report FY 2022 earnings on 01/18/2023. Analysts have provided yearly estimates in a range of $37.95 being high and $29.68 being low. For GS, this leads to a yearly average estimate of $34.85. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The Goldman Sachs Group Inc. surprised analysts by $1.12 when it reported $7.73 EPS against a consensus estimate of $6.61. The surprise factor in the prior quarter was $1.86. Based on analyst estimates, the high estimate for the next quarter is $10.07 and the low estimate is $5.70. The average estimate for the next quarter is thus $8.27.

Summary of Insider Activity:

Insiders traded GS stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 9 while that of sell transactions has risen to 37 over the past year. The total number of shares bought during that period was 209,040 while 178,699 shares were sold.

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