Goldman Sachs (GS) — Q2 2026 Earnings Preview

Reports: Tuesday, July 14, 2026, before market open | Call: 2026Q2 Earnings Call

1. Setup: A High Bar After a Big Run

GS enters this print having significantly outperformed. Shares are up sharply year-to-date and traded as high as roughly $1,106 in late June before pulling back to the $1,020–$1,055 range heading into the print — a decline of nearly 8% from the peak. The stock's momentum has made positioning a key storyline: the Street has been running a crowded pair trade of long Goldman/short Morgan Stanley, and UBS analyst Erika Najarian has flagged that this "crowded" setup means both banks face a very high bar — needing to not just beat consensus but also deliver "encouraging outlooks in terms of pipeline" to justify current valuations. Whisper numbers among buy-side investors are reportedly running above published consensus, raising the bar even further.

Adding to the valuation debate, Oppenheimer downgraded GS to Underperform on June 30, arguing capital-markets multiples have become "historically high" with optimistic assumptions baked in for M&A and trading, and that leverage plus late-cycle "fear" dynamics make current valuations look stretched — with the analysts specifically flagging trading risk as a bigger near-term concern than traditional lending risk.

2. Consensus Expectations

Per Street estimates heading into the print: - EPS: ~$14.15, up ~30% y/y - Net revenue: ~$16.04 billion - Equities trading: ~$4.9 billion (+14% y/y) - FICC trading: ~$3.67 billion (+6.1% y/y) - Investment banking fees: ~$2.75 billion (+25.6% y/y)

These would represent a deceleration in headline revenue growth versus Q1's blockbuster print, but still solid across all major segments, consistent with a market backdrop that stayed volatile and M&A-friendly through Q2.

3. What Q1 Told Us — The Baseline to Beat

Goldman's Q1 2026 results set a very high bar: net revenues of $17.2 billion, net earnings of $5.6 billion, and EPS of $17.55 — the second-highest in firm history — driving a 19.8% ROE and 21.3% ROTE. Global Banking & Markets posted record quarterly revenue of $12.7 billion at a 22%+ ROE, with record Equities revenue of $5.3 billion (record financing revenue of $2.6 billion, up 59% y/y, led by Asia prime balances) more than offsetting softer FICC intermediation in rates/mortgages. Advisory revenue rose 89% y/y as the firm reinforced its #1 global M&A ranking, even as management flagged that sponsor/IPO activity had been slower than hoped amid Middle East-related volatility.

Key threads to track into Q2:

Investment banking pipeline durability. CEO David Solomon said the firm's backlog closed 2025 at its highest level in four years and "extraordinary replenishment" kept the backlog robust even after strong Q1 accruals. He noted geopolitical risk was being outweighed by corporates' desire to "drive scale and scale creation," though IPO activity had slowed, particularly in March amid the Middle East conflict. Investors will want to know whether sponsor-driven M&A/IPO activity has reaccelerated in Q2, and whether the backlog stayed near record highs.
FICC/Equities durability vs. "extraordinary" quarters. Management was repeatedly pressed on how much of Q1's equities financing and prime brokerage strength (record levels, up sharply y/y) is structural (driven by strategic Asia expansion and capital deployment) versus cyclical. CFO Denis Coleman argued the buildout reflects a multi-year trend of expanding market caps, client engagement, and market-share gains, but acknowledged a reversal is possible "if clients were looking for a lot less by way of equity financing."
Private credit exposure. This remains a major overhang for the group given industry headlines around retail redemptions and credit quality. Solomon pushed back forcefully, framing Goldman's book as over 80% institutional, noting a 30-year track record, and citing historically low cumulative loss rates even in stress scenarios like the GFC (5-6% net of recoveries against high coupons). Coleman highlighted that life-to-date realized losses in the FICC financing/asset-secured lending book (ex-certain commercial real estate) have been zero. Watch for any credit-cost surprises or commentary on provisions, which rose in Q1 on loan growth, single-name impairments, and macro-related reserve builds.
Capital and regulation. GS ended Q1 with a 12.5% CET1 ratio (110bps above requirement), having deployed capital aggressively into prime financing, acquisition financing, and record buybacks ($5B) plus dividends ($1.4B), while also citing constructive developments on Basel III finalization and G-SIB surcharge recalibration. Any update on the regulatory timeline, capital buffer targets, and pace of buybacks will matter for the capital-return narrative.
Expense discipline / efficiency ratio. Q1 efficiency ratio was 60.5% with a 32% comp ratio (down from the usual 33%), as management continues investing in "One Goldman Sachs 3.0" (cloud migration, AI/data infrastructure) while targeting a longer-term 60% efficiency ratio. Watch comp ratio trends and non-comp expense growth (largely transaction-based, tied to elevated trading volumes).
Asset & Wealth Management flows. AWM posted its 33rd consecutive quarter of long-term fee-based net inflows ($62B in Q1, well above the firm's 5% annual flow target), aided by the Innovator ETF acquisition and T. Rowe Price partnership. Private banking/lending revenue faced NIM compression from deposit competition — a headwind management said would likely persist through 2026 before improving into 2027.

4. Macro Backdrop Into Q2

The quarter played out against continued volatility: Middle East conflict risk, AI-driven disruption concerns in software, and a private-credit "fear cycle" narrative all remained live issues, while equity markets nonetheless stayed resilient near record territory into the summer. Elevated energy prices and their pass-through to inflation are an ongoing watch item that could affect the second-half outlook for capital markets activity and Fed policy expectations. Rising global bond yields (including a multi-decade high in Japanese JGB yields) add another cross-current for trading desks and rate-sensitive businesses.

Separately, GS has stayed active on the strategic/franchise side heading into earnings — winning $70 billion in retirement-asset mandates from Verizon and Lockheed Martin, expanding its "Trump Accounts" employee benefit, and reporting unusually low redemption activity (3%, versus 10-17% at peers) in its $17 billion Private Credit Corp fund, which posted a 2.5% YTD return and ~9.6% annualized returns since 2023 inception — all data points management may lean on to counter the private-credit bear case.

5. Non-Financial Overhang

Separately from the numbers, GS general counsel Kathryn Ruemmler's decision to remain in an advisory role beyond her planned June departure — amid ongoing scrutiny of her past ties to Jeffrey Epstein — has reportedly complicated the succession search and could surface as a distraction, though it's unlikely to be addressed in detail on the earnings call itself.

6. What to Watch on the Call

Tone on the IB pipeline — does management reiterate a "highest in four years" backlog, and is there evidence sponsor/IPO activity is finally reaccelerating?
Equities/FICC financing trajectory — is the Asia-led equities financing surge continuing, or normalizing?
Credit costs and private-credit commentary — any incremental reserve builds or updates on BDC/retail fund performance given intensified market scrutiny.
Capital return pace — buyback cadence and CET1 trajectory as Basel III/G-SIB rules get finalized.
Guidance/tone for H2 2026 — given elevated energy prices, Middle East risk, and a "fear cycle" narrative around bank valuations, does management sound as constructive as in Q1, or more cautious?

Given the stock's run and the crowded long-GS/short-MS positioning, a "good" quarter may not be good enough — investors and analysts alike (per UBS's Najarian) are looking for a significant beat plus an upbeat pipeline outlook to sustain the current premium valuation.