Goldman Sachs Earnings: Strong Results Encounter Insatiable Expectations

Key Morningstar Metrics for Goldman Sachs

• Fair Value Estimate
  : $730
• Morningstar Rating
  : ★★
• Morningstar Economic Moat Rating
  : Wide
• Morningstar Uncertainty Rating
  : High

What We Thought of Goldman Sachs’ Earnings

Goldman Sachs GS reported first-quarter 2026 earnings, generating outstanding 14% revenue growth from the year-ago period and 19.8% returns on equity on the back of robust investment banking results and financing growth.

Why it matters: Our two key takeaways are that Goldman Sachs continues to fire on all cylinders, and that no one knows quite what to make of a strange macroeconomic backdrop in which growth remains solid, unemployment is low, asset prices are high, and yet risks seem to skew to the downside.

• Married with strong growth, we were encouraged to see expense discipline in noncore lines like professional services fees, which should persist through 2026. In tandem with a margin-accretive shift toward financing and away from lower-margin trade intermediation—as outsize trading volumes normalize—we now forecast 5.5% growth in postprovision net revenue, 16.7% growth in pretax earnings, and 26.3% growth in diluted EPS for the bank this year.
• Regarding the second point, we expect a tale of two halves in 2026, with strong trading and investment banking results looking likely to slow significantly in the second half of the year due to stronger comparisons and our expectations for slowing growth.

The bottom line: As we digest quarterly results, we’ve raised our fair value estimate for wide-moat Goldman Sachs to $730 from $700. That’s largely driven by time value and strong quarterly results. Notably, increasing clarity regarding regulatory changes allowed the bank to deploy more than $7 billion in capital through share repurchases, dividends, and organic growth.

• The bank still looks set to emerge as one of the long-term winners in an investment banking and trading landscape that we believe will continue to gradually coalesce around a cadre of scaled global winners. We project 10-year compound annual growth of 4.0%, 5.2%, and 9.1% in postprovision net revenue, operating profit, and diluted EPS, respectively.