FINANCIALS: Goldman Results 15-Jul: Expectations High, Pipeline Key

Goldman Sachs (GS: A2/BBB+/A) results are due 15-Jul. The last set of results showed positive revenue momentum and the operating gearing to recovering IB primary has driven good outperformance, since. Expectations are, therefore, high. Private capital, restructuring and that important M&A pipeline will be key aspects to these results, we feel.

• 1Q24 results (15-Apr) were positive driven by a strong FICC revenue result but did mention a weaker pipeline for the IB business. CET1 and dVaR were both better in the figures, so they read credit positively, we feel. Recent comments from peer banks (Jefferies results, IB conferences) have been positive and equity skewed.
• GS is one of the more geared to the private capital industry, amongst the IB majors so Apollo’s Kleinman’s bearish comments at the SuperReturn conference (early Jun) could generate some narrative. The ongoing restructuring (including selling UK GM-cards business to Barclays) will be featured, too.
• Cash credit has outperformed since last results (-17bp vs. -8bp for the banks index), as has the equity, by an impressive 17pp.
• Earnings revisions: revenues were upgraded around 2pp for this year and 1pp for next after results, pushing EPS up 9% for FY24 and 5% for next year. The gearing in the model is clear.

Results due 1230 (London time) with conf call at 1430 at https://www.goldmansachs.com/investor-relations/index.html