Goldman Sachs Gears Up for This Week's Earnings

The stock has moved lower since its recent record highs

Deputy Editor
Oct 11, 2021 at 12:38 PM
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Bank name Goldman Sachs Group Inc (NYSE:GS) is getting ready for its fiscal third-quarter earnings report, due out before the open on Friday, October 15. Yesterday, the company entered the spotlight after lowering its forecast for the U.S. economy. The major bank expects an expansion of 4% in 2022, which is down from its previous 4.4%. 

Ahead of the earnings event, the options pits are pricing in a post-earnings swing of 3.9%, which is higher than the 1% move from the company's last eight quarters. Of these reports, only three of these next-day moves were negative, including a 2.3% drop in January. 

At last check, the bank stock was up just 0.3% to trade at $394. The security has faltered from its August 30 record high of $420.76, though it appears to have found a floor at the $372 level recently. The 120-day moving average has provided another floor for pullbacks this month, and GS closed below that trendline for the first time since November of 2020 last week, before quickly reclaiming it as support. Year-to-date, Goldman Sachs stock is up 49.6%. 

GS 1011

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 2.32 calls have been bought for every put in the last 10 weeks. This ratio sits in the 81st percentile of its annual range, indicating a stronger-than-usual penchant for long calls. 

The majority of analysts share that bullish sentiment as well, with 10 of the 14 in coverage carrying a "strong buy" rating, and the remaining four a "hold" or worse. Plus, the 12-month consensus price target of $431.27 shows analysts betting on new record highs. 

Goldman Sachs stock's Schaeffer's Volatility Scorecard (SVS) sits at a 91 out of a possible 100. This implies that the equity has exceeded options traders' volatility expectations in the last year 


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