There was another round of big bank earnings today as Goldman Sachs (NYSE: GS) and Morgan Stanley (MS) announced their fiscal Q4 earnings. Let us look at how these banking giants fared in Q4.
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Goldman Sachs
The fourth quarter earnings of Goldman Sachs was a big disappointment as the bank reported earnings of $3.32 per share, a drop of 69.3% year-over-year and missing Street expectations of $5.56. GS stock slipped in pre-market trading on Tuesday following the announcement of Q4 results.
Revenues came in at $10.59 billion, a decline of 16% year-over-year and missing consensus expectations by $320 million. The fall in revenues was a result of significantly lower revenues in Asset and Wealth Management and Global Banking and Markets businesses.
Annualized return on equity (ROE) was 4.4% in Q4 while annualized return on average tangible common shareholders’ equity (ROTCE) was 4.8%.
Analysts are cautiously optimistic about GS stock with a Moderate Buy consensus rating based on six Buys and six Holds.
Morgan Stanley
Similar to Goldman Sachs, Morgan Stanley also experienced a decline in Q4 revenues of 12.4% year-over-year to $12.7 billion but still managed to beat analysts’ expectations by $100 million.
Adjusted earnings came in at $1.31 per share in the fourth quarter, versus $2.08 in the same period last year but beating Street estimates of $1.25
In Q4, MS delivered an ROTCE of 12.6%.
Wall Street analysts remain cautiously optimistic about MS stock with a Moderate Buy consensus rating based on seven Buys, five Holds, and one Sell.