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Goldman Sachs (GS) shares flat despite blowout Q3 numbers
Goldman Sachs (GS) delivered a blockbuster Q3 report on Wednesday as earnings more than doubled the Wall Street estimate, but it did not translate into share gains as analyst Jim Cramer bemoaned the current “pathetic” nature of bank stocks.
Before open, Goldman Sachs posted $9.68 earnings per share (EPS) and $10.78bn revenue for three months to 30th September, the latter of which climbed 30% year over year.
This was easily enough to beat the $4.79 EPS and $9.46bn consensus.
Goldman Sachs CEO David Solomon said that its strong performance was driven by its ability to serve clients successfully during a very challenging and uncertain period.
While the numbers smashed expectations, GS stock actually dipped during early trading.
Renowned analyst Jim Cramer said that he continues to be surprised by how little an impact an excellent report can have on bank stocks.
He noted: “Even when they deliver great numbers, it just doesn’t matter…. Goldman Sachs was unbelievable and it’s [the stock] is literally down.”
Cramer believes that banks will continue to struggle until the Federal Reserve raises interest rates, and even then, younger investors with an aversion to big banks may not buy in due to a preference for services such as PayPal (PYPL).
While Goldman Sachs posted beats, Bank of America (BAC) and Wells Fargo (WFC) both failed to live up to expectations on at least one front.
Bank of America came in with $20.45bn revenue in Q3, which was $350m short of the $20.8bn forecast.
Profits also fell 16% to $0.51 EPS or $4.9bn, though that did edge out the consensus by two cents.
Wells Fargo was ahead of FactSet estimates with revenue of $18.9bn, but net income of $0.42 per share fell short.
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