The Goldman Sachs Group, Inc. (GS) Pre-Earnings Brief

Q1: Does the firm expect full-year 2026 net revenues to exceed $64 billion?

Why it matters: Net revenue growth is a core driver of the investment thesis for Goldman Sachs, reflecting strength across investment banking, markets, and asset management; sustained growth above recent run-rate supports higher valuation multiples given the firm's capital-light shift.

Bull answer: Yes, we are confident in exceeding $64 billion driven by strong IB backlog conversion, record equities financing momentum, and continued AWM fee growth.

Bear answer: No, we see risks to the $64 billion level from volatile FICC intermediation and macro uncertainty potentially pressuring overall top-line.

Q2: Will annualized ROE for 2026 exceed 18%?

Why it matters: ROE is a key profitability metric for banks; consistently above 18% would validate management's focus on higher-return businesses like financing and alternatives, directly supporting EPS growth and shareholder returns via buybacks.

Bull answer: Yes, we expect ROE to comfortably exceed 18% for the full year, underpinned by record equities performance and disciplined expense control.

Bear answer: No, ROE may fall short of 18% if FICC revenues remain challenged or credit provisions rise materially.

Q3: Does the investment banking fee backlog support over $11 billion in fees for 2026?

Why it matters: Investment banking fees (advisory + underwriting) are a high-margin, cyclical revenue stream central to GS's franchise strength; beating this threshold would signal a robust M&A and ECM recovery, a major positive for the bull thesis on deal activity rebound.

Bull answer: Yes, the backlog and pipeline give us high confidence in surpassing $11 billion, with strong advisory and equity underwriting momentum continuing.

Bear answer: No, the backlog conversion may not reach $11 billion due to delayed deal closings or softer debt underwriting environment.

Q4: Will combined FICC and Equities financing revenues exceed $13 billion for the full year 2026?

Why it matters: Financing revenues have become a more durable, higher-quality revenue source (up significantly as % of markets revenues); growth above this level highlights successful shift away from volatile intermediation and supports a rerating of GS as a more stable earnings compounder.

Bull answer: Yes, we are on track to exceed $13 billion with record prime balances and continued expansion in structured financing.

Bear answer: No, financing revenues may miss $13 billion if client balances moderate or funding costs rise.

Q5: Will long-term fee-based net inflows in Asset & Wealth Management exceed $200 billion for 2026?

Why it matters: Consistent inflows drive higher-fee AUM growth, a key pillar of the thesis for scaling capital-light revenues and improving overall firm margins/ROE; strong inflows validate the platform's competitiveness in wealth and alternatives.

Bull answer: Yes, we expect inflows well above $200 billion, continuing the streak of strong quarterly performance and alternatives fundraising.

Bear answer: No, inflows could fall below $200 billion amid market volatility impacting client allocations to alternatives and wealth products.

Q6: Does management expect full-year 2026 diluted EPS to exceed $58?

Why it matters: EPS is the ultimate bottom-line metric for equity investors; beating $58 would confirm operating leverage from revenue growth and expense discipline, directly feeding into higher book value growth and potential for increased capital returns.

Bull answer: Yes, we have line of sight to EPS above $58 supported by top-line momentum and efficient cost base.

Bear answer: No, EPS is likely to come in below $58 given potential pressures in FICC and higher provisions.