Where Will Goldman Sachs Go Post-Earnings?

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With shares of Goldman Sachs (NYSE:GS) trading around $175, is GS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Goldman Sachs is engaged in investment banking, securities, and investment management. It provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, and high net worth individuals. The company operates in four segments: investment banking, institutional client services, investing and lending, and investment management. Through its segments, Goldman Sachs provides valuable investment services to consumers and companies worldwide.

Goldman Sachs today reported net revenues of $34.21 billion and net earnings of $8.04 billion for the year ended December 31, 2013. Diluted earnings per common share were $15.46 compared with $14.13 for the year ended December 31, 2012. Return on average common shareholders’ equity (or, ROE) was 11.0 percent for 2013. Fourth quarter net revenues were $8.78 billion and net earnings were $2.33 billion. Diluted earnings per common share were $4.60 compared with $5.60 for the fourth quarter of 2012 and $2.88 for the third quarter of 2013. Annualized ROE was 12.7 percent for the fourth-quarter of 2013. “Our work in advancing our client franchise and in ensuring continued cost discipline has allowed us to provide solid returns even in a somewhat challenging environment,” said Lloyd C. Blankfein, Chair and Chief Executive Officer. “We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve.”

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