The Goldman Sachs Group, Inc. (NYSE: GS) concluded fiscal year 2025 on a mixed note, facing challenges in its consumer platform business while simultaneously demonstrating financial resilience in other areas. The firm revealed fourth-quarter results impacted by considerable markdowns and exit-related expenses connected to its Platform Solutions segment, primarily related to the transition of Apple Card loans to held-for-sale status.
In this quarter, Goldman Sachs recorded $2.26 billion in markdowns aligned with the transfer of these loans, along with costs incurred from contract terminations. These factors contributed to a 3% decline in net revenue year-over-year, totaling $13.45 billion, falling short of the $13.79 billion consensus estimate. However, earnings on a GAAP basis rose notably to $14.01 per share from $11.95 in the previous year, outperforming the consensus estimate of $11.65.
An analyst from Bank of America Securities, Ebrahim H. Poonawala, reacted positively to these results, raising the price target for Goldman Sachs shares to $1,100 from $1,050 while maintaining a Buy rating. Poonawala highlighted that the company's consistent ability to exceed earnings per share (EPS) expectations by roughly 15% over the last four quarters has been a significant driver of its stock performance.
Looking ahead to fiscal 2026, the analyst expressed confidence in Goldman Sachs’ potential to achieve stronger-than-anticipated EPS growth. This optimism is underpinned by several factors: recent solid quarterly financial performances, revitalization in mergers and acquisitions (M&A) and initial public offering (IPO) activity, a more supportive regulatory landscape, and management’s commitment to consistent growth and profitability.
Specifically, Poonawala forecasts a 15% increase in investment banking revenues for fiscal year 2026, complemented by a modest 3% rise in market revenues. He cautioned that these estimates are conservative and could prove higher if major macroeconomic shocks do not materialize. The analyst emphasized that expanding deal activity will likely be fueled by strong demand from both strategic clients and sponsors, along with a favorable regulatory environment, declining interest rates, and steady equity market conditions.
Although investment banking currently accounts for approximately 15% of Goldman Sachs' total revenue, Poonawala noted its significance in generating ancillary revenue streams across other business units, including financing, trading, and wealth management. Consequently, growth in this sector could have far-reaching positive effects throughout the firm.
Accordingly, the analyst revised upward his EPS forecast for fiscal 2026 to $58.64 from $57.30, reflecting expectations of slightly stronger revenue growth. The EPS projection for fiscal 2027 remained steady at $67.30, representing an 8.1% premium over the consensus forecast.
Following these developments, Goldman Sachs Group shares were trading at $964.60, down 1.15% at the time of reporting. The stock remains near its 52-week high of $981.25.