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News  ›  Benzinga

Analyst Says Goldman Sachs CEO David Solomon Faces Key Challenge In Managing Earnings Volatility

Benzinga Logo Benzinga By Lekha Gupta
Analyst Says Goldman Sachs CEO David Solomon Faces Key Challenge In Managing Earnings Volatility

BofA Securities analyst Ebrahim Poonawala raised Goldman Sachs' price target to $1,050 from $900 with a Buy rating, but notes CEO David Solomon's main challenge is managing earnings volatility. The analyst expects a 20% rebound in investment banking revenue for FY26 and normalized performance by FY27, with ROTCE approaching 19% and an efficiency ratio around 60%. Goldman's earnings have historically swung significantly, with a 56% EPS drop from 2021 to 2023, driven by capital markets business volatility.

Insights
GOOG   positive

Berkshire took a $4.3 billion position, making it the tenth largest holding. Positive factors include strong AI strategy, accelerating growth across services, and resolution of antitrust lawsuit


GS   positive

Analyst raised price target significantly (from $900 to $1,050), maintained Buy rating, and expects strong FY26 rebound with 20% investment banking revenue growth and normalized performance by FY27. However, sentiment is tempered by acknowledged concerns about earnings volatility inherent in the capital markets business.