We're raising our price target on Goldman Sachs after strong but noisy quarter
It wasn't the cleanest quarter, but there was plenty for investors to like.
TL;DR
- Goldman Sachs reported Q4 revenue of $13.45 billion, missing estimates, but EPS of $14.01, exceeding estimates.
- The divestment of the Apple credit card business caused a revenue hit to the platform solutions unit.
- Release of reserves for credit losses boosted earnings.
- Global banking and markets, and asset and wealth management segments showed better-than-expected revenue.
- CEO David Solomon anticipates acceleration in investment banking activity and noted a four-year high in the backlog.
- Medium-term targets for asset and wealth management were updated, including a higher pre-tax margin and return target.
- Global banking and markets revenue grew 22.4%, with investment banking revenue up 25%.
- Asset and wealth management revenue declined 1% year-over-year but was up 7% sequentially.
- Shareholder returns included a 50-cent-per-share dividend increase and $32 billion remaining under share repurchase authorization.