Stock Alert: Goldman Sachs

Goldman Sachs (GS) has seen its shares tumbling from its 52-week high of $250.46 touched in mid-January after the coronavirus pandemic started gripping the world. The stock had recorded a 52-week low of $130.85 by mid-March. Since then, the stock has been volatile. On Tuesday, it traded up $1.30% or $2.29 to close at $178.30.

Banks are one of the worst affected industries due to Covid-19 as there was a sharp contraction in economic activities. They had to set aside huge amounts for loan losses while preparing for defaults caused by economic shutdowns, to contain the impact of new coronavirus.

In the first quarter, provision for credit losses was $937 million, about four times what was provided for in the year-ago quarter. This included provisions related to growth in corporate loans and credit card loans due to the impact of COVID-19 on the broader economic environment.

In the first quarter ended March 31, earnings were down at $3.11 per share from $5.71 in the same quarter a year ago, due to higher credit losses. Earnings missed average estimate of 12 analysts polled by Thomson Reuters at $3.35.

Net revenues were nearly flat at $8.74 billion compared with the previous-year quarter.

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