Goldman Stock Jumps 43.6% YTD: Should You Hold or Fold Now?

Core Insights - Goldman Sachs Group, Inc. (GS) shares have increased by 43.6% year to date, outperforming the industry average of 34.3% [1] - The investment banking (IB) business is experiencing strong growth, with IB fees reaching $6.8 billion, a 19% year-over-year increase in the first nine months of 2025 [5][9] - The company is focusing on strategic streamlining, exiting underperforming consumer banking ventures, and enhancing its Global Banking and Markets and asset and wealth management divisions [10][12] Investment Banking Performance - Goldman Sachs' IB revenues surged by 42.5% year over year in Q3 2025, driven by a resurgence in global dealmaking activity [5][6] - The bank advised on over $1 trillion in announced M&A volumes in the first nine months of 2025, positioning itself as a leader in M&A advisory [6] - Management anticipates an even stronger year for M&A activity in 2026, contingent on macroeconomic conditions [6] Strategic Streamlining and Growth Initiatives - The firm is exiting its non-core consumer banking business, which has positively impacted Global Banking and Markets revenues, increasing by 17% year over year [9][10] - Goldman Sachs raised a record $33 billion in alternatives in Q3 2025, with expectations to raise $100 billion in alternatives for the year [12] - The company plans to expand its private credit portfolio to $300 billion by 2029 and is pursuing international growth [13] Liquidity and Capital Distribution - Goldman Sachs maintains a strong liquidity profile, with cash and cash equivalents of $169 billion as of September 30, 2025 [16] - The company increased its quarterly dividend by 33.3% to $4 per common share and has a $40 billion share repurchase plan [17][18] - The firm has consistently returned capital to shareholders, with a five-year annualized dividend growth rate of 22% [17] Valuation and Earnings Outlook - The stock is trading at a forward price/earnings (P/E) ratio of 15.05, slightly above the industry average of 14.86 [23] - Earnings estimates for 2025 and 2026 have been revised upward, reflecting resilient earnings prospects [21][26] - Given the favorable momentum in dealmaking and asset management, holding onto Goldman Sachs' stock may be beneficial for investors [26]