Goldman Sachs is founded by Marcus Goldman in 1869 in New York City. It`s an American multinational investment banking firm that engages in global investment banking, investment management, securities and other financial services primarily with institutional clients.
Goldman Sachs Group Inc is expected to report its fist-quarter results on Tuesday before the bell.
s expected to see a big drop for Goldman Sachs this time. According to analysts, the revenue will come in at $6,73 billion and thats much worse than last years $10,6 billion for the Wall Street company.
Earnings per share came in at $5,94 in the same period last year, but now it is expected to see a profit of «only» $2,45. Other banks and money makers have been warning investors to be prepared for disappointing results at Goldman`s first quarter earnings this time.
The stock peaked at about $233 in 2007 and shares of Goldman are still at about the same level as it was ten years ago. That`s much better than the other big Wall Street banks. Goldman looks more stable.
s shares are trading at $158,8 and the stock has been declining since June 2015, and Mr. Blankfeins options will probably be worthless when they expire in november this year. Is Blankfein doing a bad job?
Goldman`s book value has increased every year the last ten years. Despite a lot of challenges, the bank increase about five percent last year. The problem for the bank is that the business of investment banking is not a good business anymore. Banks are entering a new era.
Their annualized return on equity is set to be under 7% and less than half what it was last year. Banks need a 10% return on equity to cover their cost of capital and Goldman will probably not reach that level any time soon.
According to Reuters, Goldman is expected to earn $7,6 billion in any of the next four years, so it makes sence for the bank shares to trade at the bank`s current 10% discount to book value.
Along with JPMorgan, Goldman Sachs is one of the worst performers on Wall Street so far in 2016. The Fed raised its policy interest rate from a range of 0,00% to 0,25% to a range of $0,25 to 0,50% and that should be profitable for the banks. But we haven`t seen any sign of that yet.
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