Goldman Sachs (GS) $938 Love the company, but will wait for a better price.

I like Goldman, it is one of the best in its financial sector, with strong market leadership positions in its segments; but after the 65% gain the past year, way better than its usual return of 17% a year over the last 10 years, I am hesitant to buy unless it declines. Earnings are projected to grow around 14% and its valuation is at the high of its range at 17 - so no bargain for sure.

What are Goldman’s strengths?

• Getting rid of the more cyclical and volatile consumer credit business was a smart move, they never really belonged in that business, and I was surprised when they teamed up with Apple for credit cards in the first place.
• The fee based Asset and Wealth Management business is their core strength and focusing on that will increase sustainable and recurring revenue. Further, their fee structure is fixed and not based on incentives reducing volatility.
• Q3 -2025 cemented that strength with revenue up 20% and earnings higher by 46% led by a massive $3.5Trillion in assets under their control. This is the 8th year of net cash inflows. What could be more stable?
• The M&A Franchise: Another core strength, Goldman consistently maintains market leadership in the global merger and acquisition business. This  Diversified "Engine Room" often leads to complimentary revenues from financing and trading, acting as a hedge. If dealmaking (M&A) is slow, market volatility usually increases, which boosts trading (FICC and Equities) revenue.
• Financing Revenue: A major growth driver in 2025–2026 has been Equities and FICC financing. Instead of just making bets on market direction, Goldman lends money and securities to hedge funds and institutions, creating a recurring revenue stream.

Is it worth buying at this expensive price with earnings looming up on 1/15/2026?

There will be a lot of strategic points to consider, and I don’t plan to do anything prior. 

For the 4th quarter, analysts expect an adjusted EPS of $11.71 and revenue of $14.26Bn. Besides EPS and rev growth, the quality of earnings would be a more important metric. It would  show that Goldman’s earnings have become more stable.

AWM net inflows, and double digit growth in fee income are key and higher revenue from advisory and financing, would show Goldman still leads in M&A and deals.

Goldman should also show operating leverage with better operating margins. 

I would be on the lookout for a slow down in business should there be weaker, sequential fee growth. Higher buybacks and dividends would signal confidence about future profits. JP Morgan didn’t signal weakness with higher provisioning, at least not more than usual, and Goldman’s provision should be interesting.