Profitability remains anchored at record levels, that it had not actually seen since the period preceding the subprime crisis - and, at $51.3 - EPS is still a quarter higher than last year's level.
At nearly 3x its book value, the stock's valuation has also returned to exuberant levels reminiscent of those that preceded the 2008 financial crisis. Everyone will make of that what they will.
A lot of water has gone under the bridge since 2019; in any case, when we noted that Goldman - tarnished by the 1MDB affair and a few missteps in both retail banking and soured real-estate loans - was trading at a discount to its book value, and at the time curiously ranked amongt the cheapest stocks of the S&P 500.
Beyond an excellent long-term performance - with revenue doubling over fifteen years, an average operating margin of 35%, and net income quadrupling - Goldman has also been a genuine ‘cannibal', i.e. a compulsive buyer of its own shares.
The number of shares outstanding has thus been almost halved over the past fifteen years. In that respect, EPS has literally increased tenfold over the period.
Again this year, Goldman is directing $12.4bn towards share buybacks - as well as $4.4bn in dividends - which, like J.P. Morgan, raises questions given the very high valuations. See on this topic Big questions still hanging over J.P. Morgan.
These very strong results serve as a barometer of Wall Street's mood at least as much as they bolster the position of David Solomon - at one point buffeted at the head of the bank - on the eve of his third term of office. He also stood out yesterday for his comments on a deal pipeline that, he said, had not been this full since the pandemic.
Periods of euphoria in the banking sector rarely herald good news. Many observers are therefore greeting the triumphant results posted by the various big US banks for several quarters now with no small measure of anxiety.
