Goldman Sachs(US:GS) ZACKSยท2025-07-14 16:46Core Insights - Goldman Sachs is set to release its Q2 2025 earnings on July 16, with expectations of solid revenue growth driven by its Global Banking & Markets division, despite concerns over declining investment banking business and rising expenses [1][4]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Q2 2025 revenues is $13.50 billion, indicating a 6.1% increase from the previous year [4]. - The consensus estimate for quarterly earnings has been revised upward to $9.43 per share, suggesting a 9.4% increase year-over-year [4][7]. Market Factors Influencing Results - Market-making revenues are expected to rise due to solid client activities and market volatility, particularly in equity markets and other asset classes [6][7]. - Impressive mergers and acquisitions activity is likely to boost investment banking revenues, with estimates pegged at $1.99 billion, reflecting a 14.8% increase from the prior year [8][10]. Net Interest Income (NII) - NII is projected to reach $2.87 billion, a 28.3% rise from the year-ago quarter, supported by strong loan demand and stable interest rates [11][10]. Expense Trends - Increased expenses are anticipated due to investments in technology, market development, and higher transaction-based costs driven by elevated client activity [12]. Price Performance and Valuation - Goldman Sachs shares have outperformed industry peers, with a current forward P/E ratio of 14.74, slightly above the industry average of 14.66 [15][19]. - The company plans to increase its dividend by 33.3% to $4 per share following the Federal Reserve's stress test, reflecting a strong liquidity position [24]. Strategic Outlook - Goldman Sachs aims to enhance its investment banking and trading businesses, with plans to expand its private credit portfolio to $300 billion over the next five years [23]. - The company has a solid track record of dividend growth, with an annualized growth rate of 22.04% over the past five years [24].