Goldman Stock Touches an All-Time High: Should You Buy It Now?

Core Insights - Goldman Sachs Group, Inc. (GS) stock reached an all-time high of $793.2, driven by strong momentum in mergers and acquisitions (M&As) and initial public offerings (IPOs) [1][8] - The company's investment banking (IB) revenues increased by 24% in 2024 to $7.73 billion, rebounding from previous declines due to geopolitical and economic challenges [6][9] - Goldman Sachs raised its dividend by 33% following the 2025 Federal Reserve stress test, indicating robust financial health and shareholder-friendly actions [8][14] Investment Banking Performance - Year-to-date, Goldman Sachs shares have appreciated by 38.3%, outperforming the industry average of 28.9% [2] - The company maintained its 1 ranking in both announced and completed M&A transactions despite a challenging market environment [6] - M&A activities are expected to remain strong in the second half of 2025, supported by favorable regulatory conditions and corporate demand for growth [9] Asset and Wealth Management - The Asset and Wealth Management (AWM) division's net revenues grew at a CAGR of 9.9% from 2022 to 2024, although there was a decline in the first half of 2025 due to market uncertainties [11] - As of June 30, 2025, the AWM division managed $3.3 trillion in assets, with a focus on expanding fee-based revenue streams [11][12] - Goldman Sachs is exploring acquisitions to enhance its AWM footprint, anticipating growth in the high-single-digit range [12] Financial Strength and Capital Distribution - Goldman Sachs has a strong liquidity profile, with cash and cash equivalents of $153 billion and near-term borrowings of $69 billion as of June 30, 2025 [13] - The company has a share repurchase plan with $40.6 billion worth of shares available under authorization, alongside a healthy dividend payout ratio of 26% [15] - The quarterly dividend was increased to $4.00 per common share, marking a 33.3% increase from the previous payout [14] Estimates and Valuation - The Zacks Consensus Estimate for Goldman's 2025 and 2026 sales implies year-over-year growth of 6.3% and 6.5%, respectively [16] - The earnings estimates for 2025 and 2026 have been revised upward to $46.21 and $52.93, indicating year-over-year growth of 13.9% and 14.6% [19] - Goldman Sachs stock is trading at a forward price/book (P/B) ratio of 2.18X, which is below the industry average of 2.33X and its peers [21] Long-term Outlook - The rebound in M&As and a robust deal pipeline are expected to support the company's IB business [25] - Goldman Sachs is positioned to handle near-term volatility with strong operational results and diverse revenue streams [24] - The stock is considered an attractive long-term investment option, supported by aggressive capital returns through dividends and buybacks [25]