Stock Analysis & Valuation The Goldman Sachs Group, Inc. (GS.SW)

• Previous Close: CHF208.00
• Sector Valuation Confidence Level: High

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	295.10	42
Graham Formula	855.70	311

Strategic Investment Analysis

Company Overview

The Goldman Sachs Group, Inc. (GS.SW) is a leading global financial institution headquartered in New York, offering a comprehensive suite of financial services to corporations, financial institutions, governments, and individuals worldwide. Operating through four key segments—Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management—Goldman Sachs excels in advisory services, underwriting, trading, and asset management. The firm is renowned for its expertise in mergers and acquisitions, capital markets, and risk management, serving as a trusted partner for high-profile clients. With a strong presence in investment banking and trading, Goldman Sachs leverages its deep market knowledge and global network to drive growth. The company’s asset management division provides tailored investment solutions, while its consumer banking arm, Marcus, expands its reach into digital banking. Founded in 1869, Goldman Sachs remains a dominant force in financial services, combining innovation with a legacy of excellence.

Investment Summary

Goldman Sachs presents a compelling investment case due to its strong market position in investment banking and trading, diversified revenue streams, and robust balance sheet. However, risks include exposure to volatile capital markets, regulatory scrutiny, and macroeconomic uncertainties. The firm’s high beta (1.38) indicates sensitivity to market fluctuations, which could impact earnings. Despite a negative operating cash flow in 2023, Goldman Sachs maintains substantial liquidity ($241.6B in cash) and a solid dividend yield (~2.8%). Investors should weigh its leadership in high-margin businesses against cyclical risks and competitive pressures.

Competitive Analysis

Goldman Sachs maintains a competitive edge through its elite investment banking franchise, global market-making capabilities, and strong brand reputation. Its ability to execute complex transactions and provide bespoke financial solutions differentiates it from peers. However, competition is intense, with rivals like JPMorgan and Morgan Stanley excelling in scale and digital transformation. Goldman’s shift toward consumer banking (Marcus) has faced challenges, lagging behind established retail banks. In asset management, BlackRock and Vanguard dominate passive investing, pressuring Goldman’s active strategies. The firm’s reliance on trading revenue exposes it to market volatility, whereas diversified competitors like Bank of America benefit from stable retail banking income. Goldman’s strengths lie in high-touch advisory services and proprietary trading, but it must innovate in digital banking and wealth management to sustain long-term growth.

Major Competitors

• JPMorgan Chase & Co. (JPM): JPMorgan is the largest U.S. bank by assets, with a dominant retail banking presence and leading investment banking division. Its scale and diversified revenue streams provide stability, but its sheer size can limit agility compared to Goldman’s niche expertise.
• Morgan Stanley (MS): Morgan Stanley rivals Goldman in investment banking and wealth management, with a stronger focus on retail brokerage (E*TRADE acquisition). Its wealth management division generates steady fees, but its trading desk is less dominant than Goldman’s.
• BlackRock, Inc. (BLK): BlackRock leads in asset management (AUM ~$10T), overshadowing Goldman’s smaller-scale active strategies. Its iShares ETF platform dominates passive investing, but Goldman retains an edge in alternative investments and private equity.
• Bank of America Corporation (BAC): Bank of America combines a vast retail network with strong capital markets operations. Its Merrill Lynch division competes in wealth management, but Goldman’s advisory prestige and trading prowess remain unmatched.
• Citigroup Inc. (C): Citigroup has a strong global footprint but lags in profitability. Its investment bank competes with Goldman in emerging markets, yet Goldman’s client relationships and deal flow are superior in high-margin transactions.