Goldman Stock Hits All-Time High: More Room to Grow or Time to Sell?

Price Performance - Goldman Sachs (GS) shares reached an all-time high of $627 during Friday's trading session, closing at$625 94 [1] - Over the past year, GS stock has surged 66 1%, outperforming the industry's growth of 56% and the S&P 500's rise of 26 4% [1] - Peers JP Morgan (JPM) and Morgan Stanley (MS) gained 66 7% and 55 8%, respectively, during the same period [1] Strong Quarterly Results - GS reported impressive Q4 2024 results, with investment banking (IB) income increasing 24% YoY and profits jumping 37 5% [3] - The company's strong performance was driven by robust deal-making activities and a rebound in corporate debt and equity issuances [5][6] M&A and Regulatory Environment - Expectations of increased M&A momentum, supported by potential easing of regulatory oversight under the Trump administration, are likely to boost GS's IB business [4][6] - GS maintained its 1 rank in announced and completed M&As in 2024 and ranked third in equity underwriting [8] Strategic Business Focus - GS is scaling back its consumer banking footprint, including exiting partnerships with Apple and transferring its GM credit card business to Barclays [9][10] - The company sold its GreenSky platform and Personal Financial Management unit in 2023 and 2024, respectively, to focus on core IB and trading businesses [10] Capital Distribution and Liquidity - GS increased its common stock dividend by 9 1% to $3 per share in July 2024, with a five-year annualized dividend growth rate of 24 53$30 billion, with $10 billion remaining at the end of 2024 [12] - GS maintains a strong liquidity position, with$182 billion in cash and cash equivalents as of Dec 31, 2024 [12] Private Equity and Credit Expansion - GS plans to expand its private credit portfolio to $300 billion in five years, focusing on private equity and asset managers [15] - The company is establishing the Capital Solutions Group to integrate financing, origination, structuring, and risk management operations [16] - GS aims to expand its lending business internationally, starting with Europe, the UK, and Asia [15][16] Valuation and Investment Outlook - GS stock is trading at a forward P/E of 13 72X, a 4 3% discount compared to the industry average of 14 24X [18] - The stock is also trading at a discount compared to peers JPM (14 63X) and MS (17 02X) [19] - GS's leadership in M&A, strong liquidity, and expansion in private credit position it well for growth in 2025 and 2026 [20][21]