Here's How to Play Goldman Stock Ahead of Its Q1 Earnings Release

Core Viewpoint - Goldman Sachs is set to release its first-quarter 2025 earnings on April 14, with expectations of revenue growth but a slight decline in earnings estimates compared to the previous quarter [1][5]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Q1 2025 revenues is $15.16 billion, reflecting a 6.6% increase from the same quarter last year [5]. - The earnings estimate has been revised downward to $12.72 per share, indicating a 9.8% increase from the year-ago quarter [5]. Market Conditions and Performance Drivers - Market-making revenues are expected to rise due to solid client activities and market volatility driven by tariff impacts and Federal Reserve monetary policy [7]. - Investment banking (IB) fees are projected to decline by 8.8% to $1.88 billion, influenced by underperformance in global M&A activities [10][11]. - Net Interest Income (NII) is estimated at $4.67 billion, showing significant growth from $2.35 billion in the prior quarter, supported by stable interest rates [12]. Expense Trends - Increased expenses are anticipated due to investments in technology, market development, and higher transaction-based costs from elevated client activity [13]. Earnings Surprise History - Goldman Sachs has a strong earnings surprise history, with an average surprise of 26.87% over the last four quarters [3]. Stock Performance and Valuation - In Q1 2025, Goldman shares underperformed compared to its industry but outperformed the S&P 500 index [16]. - The current forward P/E ratio for Goldman is 9.78X, which is lower than the industry average of 10.59X and significantly lower than peers like JP Morgan and Morgan Stanley [18][20]. Strategic Initiatives - The company plans to enhance its lending services to private equity and asset managers and aims to expand its private credit portfolio to $300 billion over five years [22]. - Goldman Sachs has a strong liquidity position, supporting capital distribution activities, including a recent 9.1% increase in its common stock dividend [23].