Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Goldman Sachs (GS), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][4]. Brokerage Recommendations for Goldman Sachs - Goldman Sachs currently has an average brokerage recommendation (ABR) of 1.91, indicating a consensus between Strong Buy and Buy, based on recommendations from 23 brokerage firms [2]. - Out of the 23 recommendations, 12 are classified as Strong Buy, and 1 as Buy, which accounts for 52.2% and 4.4% of all recommendations respectively [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [4]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" recommendation, which may mislead retail investors [5][9]. Zacks Rank as an Alternative Tool - The Zacks Rank, which classifies stocks into five groups based on earnings estimate revisions, is presented as a more reliable indicator of near-term price performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently than ABR, reflecting timely changes in earnings estimates, which can provide better insights into future price movements [11]. Current Earnings Estimates for Goldman Sachs - The Zacks Consensus Estimate for Goldman Sachs has increased by 5.9% over the past month to $45.32, indicating growing optimism among analysts regarding the company's earnings prospects [12]. - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Goldman Sachs, suggesting that the current ABR may serve as a useful guide for investors [13].

Executive Compensation - Goldman Sachs CEO David Solomon received a total compensation of $39 million in 2023, marking a 26% increase from the previous year [1] - The compensation package includes a $2 million base salary, an $8.3 million cash bonus, and the remainder in stock options [1] - Solomon is eligible for an $80 million retention bonus if he remains with the bank for another five years [1][2] Succession Planning and Retention - President and COO John Waldron, seen as Solomon's potential successor, will receive the same $80 million retention bonus if he stays until 2030 [3][7] - The retention bonuses are part of the board's strategy to ensure leadership stability and maintain a solid succession plan [5] - The decision follows Waldron's brief consideration of joining Apollo Global Management, highlighting the competitive landscape for top talent [4][5] Financial Performance and Strategy - Goldman Sachs reported surging full-year profits, driven by a revival in M&A activity and optimism about the incoming administration's economic policies [2] - The company's stock price has increased by nearly 50% over the past year and 174% since Solomon became CEO in 2018 [6] - Solomon has refocused the bank on traditional investment banking activities after significant losses in its consumer banking arm, Marcus [8] Leadership and Public Perception - Solomon's tenure has faced criticism over his DJing side hustle and use of corporate aircraft, but strong financial results have alleviated investor concerns [9] - Solomon has officially retired from DJing at major clubs and festivals, signaling a shift in focus back to the bank's core operations [8][9]

Company Overview - The company is an ETP provider offering daily-rebalanced products in leveraged, unleveraged, inverse, and inverse leveraged factors [1] - The company holds both long and short positions in various stocks to construct its products [1] - The company's AUM is primarily driven by investor interest in its products rather than market movements [3] Analyst Background - The analyst has extensive professional experience in financial markets and holds advanced degrees including an M S F and M B A from IIT Chicago [1] - The analyst leads research at the ETP issuer and provides in-depth analysis on global business, markets, Asia, culture, and trends [1][3] Disclosure Information - The analyst has no stock, option, or derivative positions in the mentioned companies and no plans to initiate any within the next 72 hours [2] - The analyst is not receiving compensation for the article other than from Seeking Alpha and has no business relationship with any mentioned companies [2]

Company Analysis - Goldman Sachs (GS) is experiencing solid earnings estimate revision activity, indicating a positive outlook from analysts for both short and long-term prospects [1][3] - Current quarter earnings estimates for GS have increased from $11 98 to $12 14 per share over the past month [4] - Current year earnings estimates for GS have risen from $42 86 to $43 37 per share over the past month [4] - GS has earned a Zacks Rank 2 (Buy), reflecting the company's strong position [4] Industry Analysis - The Financial - Investment Bank industry has a Zacks Industry Rank of 13 out of over 250 industries, placing it in the top third and indicating strong industry positioning [2][5] - The industry is benefiting from broad trends that are positively impacting securities across the board [2] - The strong industry rank suggests that the Financial - Investment Bank space is well-positioned compared to other segments [2]

Investment Banking Performance - American investment banks reported a record-breaking quarter, driven by surging trading activity around the US election and increased investment banking deal flow [2] - JPMorgan Chase's trading revenue surged 21% to $7 billion in Q4, marking its best fourth quarter ever [2] - Goldman Sachs' equities business generated $13.4 billion for the full year, also a record [2] - Banks including JPMorgan, Goldman, and Morgan Stanley exceeded expectations for the quarter, boosted by a Fed easing mode and the election of Donald Trump [3] M&A and Deal Activity - US corporations have been hesitant to engage in mergers and acquisitions due to regulatory uncertainty and higher borrowing costs in recent years [4] - Morgan Stanley's deal pipeline is the strongest it has been in 5 to 10 years, possibly even longer, according to CEO Ted Pick [5] - Banks are seeing growing backlogs of merger deals, driven by confidence in the business environment, hopes for lower corporate taxes, and smoother merger approvals [5] - Multibillion-dollar acquisitions are high-margin transactions that create a multiplier effect, generating the need for other transactions like loans, credit facilities, and stock issuance [7] - The M&A market is expected to pick up, with Morgan Stanley and Goldman Sachs excited about pushing through merger deals [8] Capital Markets and IPO Activity - Capital markets activity, including debt and equity issuance, recovered by 25% from depressed 2023 levels, according to Dealogic figures [6] - The IPO market, another engine of value creation for Wall Street, is also set to pick up after a slow period in recent years [8] - CEO confidence has significantly improved, with a backlog from sponsors and increased appetite for deal-making supported by an improving regulatory backdrop [9] Industry Outlook - The Wall Street ecosystem is regaining momentum, with a return to an environment favorable for traders and bankers after a muted period of Fed rate hikes [3] - The combination of improved deal activity, capital markets recovery, and IPO market resurgence is expected to create a profitable time for Wall Street's dealmakers and traders [9]

Keefe, Bruyette & Woods analyst David Konrad reiterated an Outperform rating on the shares of Goldman Sachs Group Inc GS and raised the price forecast to $690 from $686.The analyst notes Goldman Sachs posted an impressive quarterly performance, fueled by substantial gains in trading and continued growth in Asset Management.According to the analyst, trading revenue surged 33% year-over-year despite a tough comparison, with equities remaining stable quarter-over-quarter amid usual seasonal trends.The firm’s s ...

IPO Market Outlook - Goldman Sachs CEO David Solomon predicts an end to the multi-year IPO drought, stating that the capital markets are showing signs of life ahead of President-elect Donald Trump's inauguration [1] - The tech IPO market has been largely dormant since late 2021 due to inflation and rising interest rates, but Solomon expects momentum in both M&A and IPOs [2] - Solomon notes a significant backlog from sponsors and an increased appetite for dealmaking, supported by an improved regulatory environment [3] Market Performance and IPO Activity - The S&P 500 posted its biggest gain since November, driven by a tame inflation report and Goldman Sachs' strong results, with Goldman's stock rising 6% on Wednesday [3] - Despite a strong two-year run in the stock market and record highs for the S&P 500 and Nasdaq, IPOs have yet to see a resurgence, with ServiceTitan's December debut being the first significant venture-backed IPO since April [4] - Some companies, such as chipmaker Cerebras and online lender Klarna, have indicated readiness to go public, though regulatory reviews have slowed the process [5] Structural Challenges for Public Companies - Solomon highlights structural reasons for companies not going public, noting a decline in the number of public companies in the US from 13,000 25 years ago to 3,800 today [6] - Higher disclosure standards and the availability of private capital at scale make being a public company less attractive [6]

Investment Rating - The report does not explicitly state the investment rating for Goldman Sachs (GS US) [1][2][3] Core Views - Goldman Sachs reported strong Q4 2024 results, with both revenue and profit exceeding expectations [1][2] - Revenue grew by 22.5% YoY, significantly higher than the Bloomberg consensus estimate of 9.1% [3] - Net profit attributable to common stockholders surged by 110.1% YoY, far surpassing the Bloomberg consensus estimate of 44.7% [3] - Global Banking & Markets (GBM) and Asset & Wealth Management (AWM) segments showed particularly strong performance [1][3] Business Segment Performance Global Banking & Markets (GBM) - GBM revenue increased by 33.4% YoY, driven by strong performance in investment banking, FICC, and equities [3] - Investment banking revenue was boosted by significant growth in equity and debt underwriting [3] - FICC and equities businesses benefited from increased net financing revenue [3] Asset & Wealth Management (AWM) - AWM revenue grew by 7.6% YoY, outperforming the Bloomberg consensus estimate of -6.5% [3] - Private banking and loan net revenue were positively impacted by higher deposit balances [3] Platform Solutions - Platform Solutions revenue increased by 15.9% YoY, exceeding the Bloomberg consensus estimate of 8.2% [3] Financial Metrics - Net interest income surged by 75.1% YoY, significantly higher than the Bloomberg consensus estimate of 49.0% [3] - Non-interest income grew by 15.5% YoY, surpassing the Bloomberg consensus estimate of 6.9% [3] - Total provision for credit losses was $351 million, a 39.2% YoY decrease, better than the Bloomberg consensus estimate of $384 million [3] - ROE increased by 7.5 percentage points YoY to 14.6%, higher than the Bloomberg consensus estimate of 9.9% [3] - ROTCE rose by 7.9 percentage points YoY to 15.5%, exceeding the Bloomberg consensus estimate of 10.5% [3] - CET1 ratio improved by 0.5 percentage points YoY to 15.0%, above the Bloomberg consensus estimate of 14.7% [3] - Cost-to-income ratio decreased by 11.5 percentage points YoY to 63.1%, better than the Bloomberg consensus estimate of 67.0% [3] Loan and Deposit Growth - Total loans grew by 7.1% YoY, outperforming the Bloomberg consensus estimate of 5.8% [3] - Total deposits increased by 1.2% YoY, below the Bloomberg consensus estimate of 4.1% [3] Dividend - The dividend per share (DPS) was $3.00, in line with the Bloomberg consensus estimate [3]

January 15, 2025 Our culture and leading client franchise are the foundation of our strategy Full Year and Fourth Quarter 2024 Earnings Results Presentation STRATEGIC Client Service O B J E C T I V E S Harness One GS to Serve Our Clients with Excellence Partnership Run World-Class, Differentiated, Durable Businesses Integrity Invest to Operate at Scale Excellence 1 World-class and interconnected franchises positioned to deliver mid-teens returns Leading Global Active #1 M&A Advisor1 Asset Manager3 One Globa ...

Financial Data and Key Metrics - The company reported strong performance in Q4 2024, reflecting its ability to serve clients effectively in a dynamic environment [5] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - The company continues to focus on serving clients effectively, indicating a client-centric strategy in a competitive environment [5] Management Commentary on Operating Environment and Future Outlook - The CEO expressed satisfaction with the company's performance, highlighting its ability to navigate a dynamic environment [5] - The CEO also acknowledged the devastating fires in Los Angeles, showing concern for the community, including colleagues and clients [4] Other Important Information - The earnings presentation and related materials are available on the company's Investor Relations website, including forward-looking statements and non-GAAP measures [2] - The conference call is copyrighted material and cannot be duplicated or rebroadcast without consent [2] Q&A Session Summary - No Q&A session details were provided in the content