Goldman Sachs Group delivered a near-historic first-quarter performance on Monday, reporting net revenues of $17.23 billion and net earnings of $5.63 billion, good for a diluted earnings per share of $17.55 — well above the analyst consensus range of $16.41 to $16.86. The quarter ranks as the firm's second-best ever for both profit and revenue, trailing only Q1 2021, when pandemic-era stimulus drove an extraordinary surge in activity across capital markets.
The standout performer was the equities trading desk, which generated a record $5.33 billion in revenue, driven by elevated client activity amid heightened volatility across global markets. The firm's Global Banking and Markets division posted total revenues of $12.74 billion, reflecting strong demand for risk management and equity intermediation. Asset and Wealth Management revenues also rose, with assets under supervision reaching a record $3.65 trillion, reflecting a combination of net inflows and market appreciation.
However, the headline numbers masked a significant disappointment in the fixed income, currencies, and commodities trading unit. Goldman's FICC desk fell short of analyst targets by approximately $850 million, a miss attributed in part to compressed spreads in credit markets and lower client activity in rates and currency products relative to the elevated expectations set by recent macro volatility. Additionally, provisions for credit losses came in higher than anticipated, reflecting lingering stress in consumer credit portfolios tied to its legacy Marcus business.
Despite the mixed read, the firm's financial profile remains robust. Goldman achieved an annualized return on equity of 19.8% and an efficiency ratio of 60.5%. The firm returned $6.38 billion to shareholders during the quarter, including $5.0 billion in share repurchases at an average cost of $923.49 per share, alongside $1.38 billion in common stock dividends. As of March 31, total assets stood at $2.06 trillion and deposits reached $561 billion.
Goldman's earnings set the tone for a pivotal week in which JPMorgan Chase, Wells Fargo, Citigroup, Morgan Stanley, and Bank of America are all slated to report results. Investors will be scrutinizing those reports for signs that the broader banking sector has navigated the dual challenges of elevated energy costs and geopolitical uncertainty without significant deterioration in credit quality. Bank of America and Morgan Stanley in particular face close scrutiny given their significant FICC exposure.
Goldman shares were trading roughly 4% lower in Monday's session, a reflection of the market's high bar after a nearly 95% surge in the stock over the prior year. At a forward price-to-earnings ratio of approximately 16 times, the valuation remains reasonable relative to peers, and analysts at Evercore ISI Group and Jefferies maintained Outperform and Buy ratings respectively ahead of the report. The median analyst price target of $990 implies upside of approximately 9% from current levels, suggesting the selloff may be creating a tactical entry point for long-term investors.