How to Approach Goldman Stock Ahead of Its Q3 Earnings Release?

Core Insights - Goldman Sachs is set to release its third-quarter 2025 earnings on October 14, with expectations of solid growth in its Global Banking & Markets division and investment banking business, despite rising expenses [1][4][12] Earnings Performance - Goldman has a strong earnings surprise history, with an average surprise of 24.37% over the last four quarters [2][3] - The Zacks Consensus Estimate for Q3 2025 revenues is $14.01 billion, reflecting a 10.4% increase year-over-year, while earnings per share are projected at $10.93, indicating a 30.1% rise from the previous year [4] Revenue Drivers - Market-making revenues are expected to increase due to solid client activity and market volatility, influenced by tariff impacts and Federal Reserve policy changes [5][6] - Investment banking fees are projected to rise by 19.4% to $2.22 billion, supported by a rebound in global M&A activity and a strong IPO market [6][10] - Net Interest Income (NII) is estimated at $2.91 billion, a 12.1% increase year-over-year, aided by stable interest rates and solid loan demand [11] Expense Considerations - Increased expenses are anticipated due to investments in technology and higher transaction-based costs driven by client activity [12] Strategic Focus - Goldman is streamlining operations by retreating from non-core consumer banking ventures and focusing on asset and wealth management, aiming for a more stable revenue base [21] - The company plans to expand its lending services to private equity and asset managers, with a goal to grow its private credit portfolio to $300 billion over five years [22] Valuation Metrics - Goldman is currently trading at a forward P/E of 14.99, slightly above the industry average of 14.75 [18] - The company has increased its quarterly dividend to $4.00 per share, a 33.3% increase, reflecting a strong capital return program [25]