Goldman Sachs (GS) is a global investment banking and securities firm. The company provides services to corporations, financial institutions, governments, and high-net worth individuals.
GS is a world leader in merger and acquisitions (M&A) advice as well as equities and debt underwriting. The long-term prospects of the group are underpinned by its revenue scale and platform approach, which places it ahead of its peers amid the prevailing shift towards digitisation in the industry.
Technically, a price that appears to be developing a symmetrical triangle pattern in a previous uptrend makes for an attractive investment opportunity (see the black converging trendlines on the main chart as well as the insert).
A symmetrical triangle pattern is characterised by two converging trendlines that connect a series of sequential peaks and troughs. This is considered a continuation pattern where the direction of the trend that was prevailing before the pattern formed, is likely to continue.
According to the RSI (Relative Strength Index), the stock will be overbought at ~$420. This classifies our profit target of $380 as realistic.
We suggest a medium capital at-risk allocation to this trade.
Local investors can gain exposure to Goldman Sachs through the JSE-listed FNB ETNs under the share codes GSETNC (with currency exposure) and GSETNQ (without currency exposure).
Share Information
| Share code | GS |
|---|---|
| Industry | Financial Services |
| Market Capital (USD) | 116.88 billion |
| One year total return | 8.17% |
| Return year-to-date | 2.10% |
| Current price (USD) | 342.54 |
| 52 week high (USD) | 389.58 |
| 52 week low (USD) | 287.75 |
| Financial year end | December |
| Closing paragraph | Several technical indicators confirm a bullish trend. The share remains just above its 200-day simple moving average. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 30.06 | 26.74 | 36.29 | 40.45 |
| Growth (%) | -11.05 | 35.71 | 11.49 | |
| Dividend Per Share (USD) | 9.00 | 10.43 | 11.33 | 11.98 |
| Growth (%) | 15.91 | 8.62 | 5.74 | |
| Forward PE (times) | 12.81 | 9.44 | 8.47 | |
| Forward Dividend Yield (%) | 3.05 | 3.31 | 3.50 | |
| Closing paragraph | Earnings growth is expected to pick up over the forecast horizon. The stock holds a Beta of 1.15, which indicates that it is slightly more volatile than the S&P 500 index. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
VOE- Time exit (Close the position) |
CNC - Buy (Continue to hold) |
IEX - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 137.42 | 66.44 | 212.62 |
| Current | 136.30 | 67.61 | 216.30 |
| Movement | -0.1% | 1.8% | 1.7% |
| Summary text | The trade reached our time-exit on Friday, and we closed the position. |
The stock remains above key support levels and is trading just below its 200-day simple moving average. Upside price momentum remains supportive.
Our profit target is $76 with a trailing stop-loss of $64. Exit the position on 30 November 2023. |
The price remains above key support. Currently below its 200-day simple moving average. Fading upside momentum is a concern.
Our profit target is $240 with a trailing stop-loss of $206.50. Exit the position on 20 October 2023. |
| Share Name and position |
AZO - Buy (Continue to hold) |
BTAL - Buy (Continue to hold) |
FTNT - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 2556.06 | 19.20 | 63.50 |
| Current | 2576.10 | 19.22 | 63.10 |
| Movement | 0.8% | 0.1% | -0.6% |
| Summary text |
The price appears to be developing an incomplete broadening top pattern, which remains of interest. Remains above its 200-day simple moving average. Upside price momentum has halted, which is a concern.
Our profit target is $2 800 with a trailing stop-loss of $2 476. Exit the position on 8 November 2023. |
A falling wedge pattern remains of interest. The stock is trading below its 200-day simple moving average, with upside price momentum supportive of the trade idea.
Our profit target is $21 with a stop-loss of $18.50. Exit the position on 13 December 2023. |
Appears to be developing a fishhook pattern, which is of interest. Testing its 200-day simple moving average. Fading downside price momentum supports the trade idea.
Our profit target is $76 with a trailing stop-loss of $58.50. Exit the position on 24 January 2024. |
