Major U.S. banks, including Goldman Sachs GS and BlackRock BLK, reported their fourth-quarter results on Wednesday.
As well-known leaders in asset management, it’s worth analyzing if now is a good time to invest in these New York-based financial giants.
Goldman Sachs Surprises with Strong Earnings
In a busy earnings day, Goldman Sachs stood out with impressive Q4 results. Alongside them, three other major banks—Wells Fargo WFC, Citigroup C, and JPMorgan JPM—also released their figures.
Goldman announced an astonishing earnings per share (EPS) of $11.95, exceeding expectations of $8.07 for a surprising 48% increase. The firm recorded Q4 profits of $4.11 billion, driven by quarterly sales of $13.86 billion, which surpassed estimates by 13%.
The bank attributed these remarkable results to a favorable operating environment. Compared to the same period last year, Q4 earnings doubled while sales rose 22% from $11.31 billion.
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BlackRock Posts Solid Performance
While BlackRock’s Q4 results didn’t feature a significant surprise, they showcased strong financial performance. The company reported EPS of $11.93, exceeding expectations of $11.27, with sales reaching $5.67 billion, slightly above estimates.
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Analyzing year-over-year performance, BlackRock saw over 20% growth in both earnings and sales. The firm also reached a significant milestone with assets under management (AUM) totaling $11.6 trillion, aided by quarterly net inflows of $281 billion.
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Annual Overview
BlackRock continues to hold its position as the world’s largest money manager, while Goldman Sachs ended 2024 as a leader in mergers and acquisitions (M&A).
Goldman’s total sales surged 16% for the fiscal year 2024 to $53.51 billion, up from $46.25 billion in 2023. Annual earnings also saw a remarkable increase of over 70%, totaling $14.28 billion or $40.54 per share, making it one of the highest figures in its history since its founding in 1867.
BlackRock’s overall sales reached $20.41 billion, growing 14%, while earnings grew over 15% to $6.37 billion or $43.61 per share. Notably, the firm also reported record annual net inflows worth $641 billion, further solidifying its position in the market.
Stock Performance and Valuation Insights
In the past year, Goldman’s stock increased by 62%, outperforming BlackRock and the S&P 500 Index, which saw gains of 26%. Over the last five years, Goldman has risen 145%, ahead of BlackRock and the broader market which both increased by over 80%.
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Currently, Goldman Sachs trades at a forward price-to-earnings (P/E) ratio of 13.9, which is a discount compared to BlackRock, trading at approximately 21.2.
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Final Thoughts
Given Goldman Sachs’ more attractive valuation and the likelihood of rising earnings estimates following their strong Q4 surprise, the stock is rated as Zacks Rank #2 (Buy), while BlackRock holds a Zacks Rank #3 (Hold).
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
BlackRock (BLK) : Free Stock Analysis Report
Wells Fargo & Company (WFC) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
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