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- GS 3Q25 - Strong Q3. "Fair amount of investor exuberance". What's next? Bull case $1,050 Bear case $550
GS 3Q25 - Strong Q3. "Fair amount of investor exuberance". What's next? Bull case $1,050 Bear case $550
Cheat Sheets presented by stocktwits
GOLDMAN SACHS (GS)
💎 #1 Deal Maker | Made $15.18B, Deal Fees +42%, Managing $3.45T
Q3 2025: Third Best Quarter Ever | Returned $3.3B to Shareholders | Raised Dividend 33%
💰 Market Cap: $249B | 🏢 Employees: 47,300 | 🌍 Global Presence
👨💼 CEO David Solomon | 🎯 Investment Banking | 💎 156 Years Old (Founded 1869)
$762
📉 -$24.78 (-3.15%) Today
+34% YTD
Price Target Scenarios
18-Month Horizon (Mid-2027 Targets) - Based on Current Price $762
$1,050
Bull Case (+38%)
M&A Supercycle
Capital Markets Boom
📊 Math:
If Goldman earns $60/share in 2027 × 17.5x = $1,050
🚀 What Needs To Happen:
M&A stays hot • More companies go public • Deal fees keep growing 20%+ per year • Trading stays strong • Rich people keep giving them money to manage • Profit margins around 17-18% • Trump cuts regulations • Fed cuts interest rates • Market pays 17-18x earnings for Goldman (vs 15-16x now)
$900
Base Case (+18%)
Steady Execution
Market Inline
📊 Math:
If Goldman earns $56/share in 2027 × 16x = $900
⚖️ What Needs To Happen:
Deal fees grow steady 12-15%/year • M&A stays healthy (not crazy) • Trading normalizes but stays okay • Assets under management grow to $3.8T • Profit margins stay 14-15% • Costs stay under control • Dividend grows 8-10%/year • Return $10-12B/year to shareholders • Market values Goldman at normal 16x earnings
$550
Bear Case (-28%)
Deal Drought
Recession Hits
📊 Math:
If Goldman earns $42/share in 2027 × 13x = $550
🔻 What Could Go Wrong:
Recession kills deals • Banking fees drop 30-40% • Trading blows up in volatile markets • Credit losses pile up • Profit margins fall to 8-10% • Costs keep rising • Amazon/tech companies steal business • Regulations get tougher • Fed keeps rates high • Geopolitical chaos • Market only pays 12-13x earnings in recession • Stock could drop to $550 = -28% from here
Bottom Line for Retail Investors
🏆
Deal-Making Exploded
Banking fees +42% to $2.66B. Beat by $500M. Advised on $1T in deals - $220B more than #2. Recent: EA $55B, Baker Hughes $14B. Pipeline at 3-year high. Money printer back ON.
💎
Third Best Quarter Ever
$15.18B revenue - only 2 better quarters in 156 years. Beat by $1B. Profit $4.1B (+37%). EPS $12.25 crushed $11 estimate. Two straight record quarters.
📈
Wealth = Recurring Revenue
Managing record $3.45T. Added client money 31 quarters straight. Raised $33B in Q3, $100B this year. Like Netflix - monthly fees whether market up or down. Predictable income.
⚠️
Expenses Rose + Equities Missed = Stock Down 3%
Stock dropped from $786.78 to ~$762 despite massive beat. Why? Expenses climbed (comp, tech, hiring). Equities missed by $160M (+7% vs expected +12%). Efficiency ratio 62.1% = still work to do. If deals slow or trading normalizes, operating leverage disappears fast. At 15-16x P/E on peak earnings, any miss = 10-15% drop. Market nervous about expense discipline and whether this IB surge is sustainable.
📊 The Bottom Line: Record Quarter - Deal Fees Exploded 42%
Made $15.18B (Beat By $1B) • Profit Per Share $12.25 (Beat By $1.25) • Net Income Up 37% • Deal Fees Up 42% to $2.66B • Managing Record $3.45T • Returned $3.3B to Shareholders • Raised Dividend 33% • Stock Down 3% Because Costs Rose 💪
💰
$15.18B
Q3 2025 Revenue
+20% YoY
⚡
$2.66B
IB Fees
+42% YoY
🎯
$12.25
EPS Q3
+37% YoY
🚀
$3.45T
AUM Record
31st Qtr Inflows
📞 Key Q3 2025 Earnings Call Highlights
🎊
Deal Revenue +42%
$2.66B in banking fees - beat by $500M. Advised EA $55B sale, Baker Hughes $14B deal. IPOs back: Klarna, Figma, Figure. Pipeline at 3-year high. #1 for deals in US, Europe, Asia. When companies need help with mergers, they call Goldman.
🚨
Trading Mixed
Bond trading $3.5B (+17%), set records. Trump tariffs = wild markets = Goldman wins. BUT stock trading missed by $160M. Prime brokerage hit records. Financing = 40% of trading (steady part). Made money 7 quarters straight.
💎
Wealth = Steady Fees
$4.4B managing rich people's money (+17%). $3.45T assets (record). Added $56B new money in Q3. Raised $33B - full year $100B (vs $65B normal). $4.6B bonus fees waiting to unlock. Like subscription - clients pay monthly whether market up or down.
🔬
Raised Dividend 33%
Dividend $3 → $4/quarter ($16/year = 2.1% yield). Bought $2B stock. Paid $1.3B dividends. Total Q3: $3.3B to shareholders. YTD: ~$10B. Balance sheet strong. Trump cutting regulations = MORE buybacks coming.
📍 CEO Solomon - "#1 in Deals": Goldman advised on $1T in deals YTD - $220B ahead of #2. Recent: EA $55B, Baker Hughes $14B, Thoma Bravo $12B. "CEOs are done waiting - making big moves." Regulatory environment better under Trump = more deals.
🚀 AI Initiative Launched: "One Goldman Sachs 3.0" using AI to cut costs, work faster. Goals: better service, higher profits, more efficient. Some analysts skeptical during record earnings.
💰 Record Fundraising: Raised $33B in Q3 (record). Will hit $100B this year vs normal $65B. $4.6B in performance fees waiting. PE firms have $1T cash + $4T in companies. With rates falling, expect MORE deals 2026.
🎯 IPOs Back: Klarna, Figma, Figure went public. "IPO market recovering." Goldman gets huge fees for IPOs.
🔮 Regulations Improving: "Real progress coming fall 2025 and H1 2026." Lower capital requirements, easier rules. Could unlock BILLIONS for buybacks.
🚀 Why GS Bulls Are Right
💎
#1 Deal Maker
$1T in deals YTD - $220B ahead of #2. Pipeline at 3-year highs. PE has $1T cash + $4T in companies = years of deals. AI boom, energy shift = mega-deals. Goldman gets 1-2% fees on billion-dollar deals. CEO expects 2026 stronger.
⚡
Wealth = Monthly Fees
Managing $3.45T (record). Added money 31 quarters straight. Raised $33B in Q3 - $100B this year. Fees = $2.9B/quarter (record). $4.6B bonus fees waiting. Rich clients never leave. Like Netflix - pays whether market up or down.
👑
Trading = Chaos = Profit
Record financing revenues. Trump tariffs = wild markets = Goldman wins. Financing 40% of trading (was 33%) - steady part. Prime brokerage records. When markets crazy, clients need Goldman. Even if trading slows, financing keeps paying.
🚀
Buybacks + Easy Regs
Returned $3.3B in Q3. Dividend +33% to $4/quarter. YTD ~$10B returned. Balance sheet fortress. Trump cutting regulations = lower capital requirements 2026. CEO: "Significantly improves position." BILLIONS more for buybacks. $60 EPS in 2027 = stock only 12.7x at $762.
🐻 Why GS Bears Have Valid Concerns
📉
Earnings At Cycle Peak - Nowhere To Go But Down
Deal fees up 42% - that's MASSIVE and can't continue. M&A goes in cycles - every boom ends in a bust. When recession hits (and it will), deal activity DIES. Banking fees can drop 40-50% overnight. ROE of 14.2% might be the peak. Trading at 15-16x forward earnings on PEAK profits = expensive. History says when deals peak, sell the bank stocks. Bears say: "Take profits now before the music stops."
🏥
Expense Discipline Questioned - Stock Dropped Despite Beat
Expenses went UP - that's why stock dropped 3% on great earnings. Spending more on bonuses, tech, AI projects. Non-comp costs up 14%. Announcing big AI initiative sounds good but costs money. If revenue growth slows to 8-10% but costs grow 10-12%, profits get squeezed. Analysts asking: "Why announce cost cuts during record earnings?" Translation: Management sees the slowdown coming. Efficiency ratio 62.1% needs to be under 60%. Not there yet. If revenue slows, these fixed costs eat into profits.
💸
Trading Volatility Could Reverse Violently
Equities already MISSED estimates by $160M - warning sign? Trading is unpredictable - great quarter then disaster. If VIX spikes to 40+ (like 2022), clients panic and losses pile up. Private credit risks growing - questions about shady loans. Goldman using complex tools to move risk off books. Loan portfolio $222B - if economy tanks, losses mount. One bad quarter can wipe out BILLIONS. Remember 2008 financial crisis? Remember 2022 trading losses? It happens fast. Trading desks are black boxes - you don't see the risk until it explodes.
⚠️
Valuation Not Cheap For Cyclical Bank
Stock at $762 = 15.6x 2025 earnings estimate. That's EXPENSIVE for a bank. Even a great one. Book value $353.79 = trading at 2.15x. Normal range is 1.2-2.5x. If recession hits, banks trade at 1.2-1.5x book = $425-530 stock price. That's 30-44% DOWNSIDE. Bulls say "but it's Goldman!" Bears say "it's still a bank with leverage and hidden risks." Downside risk (30-40% loss) is bigger than upside potential (20-30% gain). Risk-reward FAVORS selling at $762, not buying.
This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
