Goldman Sachs (GS) reported a strong Q1 performance, driven by record equity trading revenues, but RBC Capital Markets expects the bank could see a slight decline in total revenues in 2025 and 2026.
The anticipated drop is primarily in its global banking and markets segment, as prevailing market conditions could weigh on future performance, according to the note Monday.
Goldman reported Q1 earnings of $14.12 per diluted share, up from $11.58 a year earlier, with total net revenue increasing to $15.06 billion from $14.21 billion in the same period last year.
RBC said core earnings per share came in at $14.37, ahead of its $11.35 estimate and the $12.33 consensus, driven by stronger revenues, lower expenses, and reduced provisions for credit losses.
The standout driver was equity trading, with revenue reaching $4.19 billion, marking a 27% increase from a year ago.
RBC now expects 2025 and 2026 EPS of $45.02 and $49.25, down from $45.12 and $49.35.
The firm said Goldman remains well capitalized and is focused on building more consistent revenue through its wealth and asset management, private banking, and lending businesses, which together generated $3.4 billion in Q1 revenue.
RBC lowered its price target to $560 from $610, while maintaining a sector perform rating.
Price: 515.05, Change: +11.07, Percent Change: +2.20
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