The Goldman Sachs stock price has moved sideways in the past few weeks as the strong rally takes a breather. The stock is trading at $390, which is a few points below last year’s high of $423. It has jumped by over 220% from its lowest level in 2020, becoming one of the best-performing bank stocks.
Goldman Sachs strong performance
Goldman Sachs, the storied Wall Street bank, has done well in the past two years. As a result, its total market capitalization has jumped to over $130 billion. It has even outperformed other banks like Morgan Stanley and JP Morgan.
The strong performance is mostly because the company’s top businesses have done well during the pandemic. For example, its investment banking division has performed well because of the rising dealmaking activity around the world.
For example, according to the Wall Street Journal, the company advised on M&A deals worth over $1.8 trillion, making it the best advisor in the world. It was followed by JP Morgan and Morgan Stanley. The bank was also the best performer in the equities market and was the fourth in the debt market advisory.
Its other divisions did well. For example, its wealth management solutions had a strong performance because of the remarkable wealth that was created during the Covid-19 pandemic. Most importantly, its smaller and fast-growing consumer-facing solution also performed well.
GS earnings ahead
The next key catalyst for the Goldman Sachs stock price will be the upcoming quarterly results that will come out on Tuesday next week.
Economists are optimistic that the company will report strong results for the fourth quarter. Precisely, they expect that the company’s revenue rose to $12 billion in the fourth quarter. That will be a decline from the third quarter revenue of over $13 billion. It will also be slightly higher than the $11.8 billion that it generated in the same quarter in 2020.
Goldman Sachs is also expected to report earnings per share of $11.96, which will also be higher than the $10.5 it made in the same quarter in 2020.
The bank’s earnings will come a few days after other leading banks like Wells Fargo, Citigroup, and JP Morgan publish their results. Its earnings will come in the same week as those of Bank of America and Morgan Stanley.
Is Goldman a good investment?
There are several reasons why the Goldman stock is a good investment in 2022. First, the company has seen strong growth in the past few months, and there are signs that it will continue this year. It has even taken market share from its top competitors.
Second, the bank will benefit if the Federal Reserve embraces a hawkish tone as the officials have predicted. For example, this week, the Fed Chair and other officials hinted that they will implement three or more hikes this year.
Third, analysts are optimistic about the stock. According to Webull, the average target for the stock is $460, which is high than the current $330.
Goldman Sachs stock price analysis
The daily chart shows that the GS stock price has moved sideways in the past few weeks. As a result, the stock remains between the rectangle channel, whose support and resistance are at $370 and $418. The stock is also hovering at the 25-day and 50-day moving averages. Therefore, there is a likelihood that the stock will remain inside this channel ahead of its results. Strong results will likely push the stock price to the key resistance at $418.