As the earnings season for major banks is underway, a report by the Boston Consulting Group suggests that banks can collectively create $7 trillion in value. However, global banks are unlikely to return to pre-financial crisis profitability. The report stated that this is possible through strategic agendas focused on growth, productivity, and shareholder returns.
The report recommended banks exit or reduce exposure to low-return businesses, invest in growth areas, simplify business models, and leverage artificial intelligence for a competitive edge. Furthermore, the report recommended a detailed cost-driver analysis to achieve a 40% increase in productivity.
Banking majors like JP Morgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC) finished lower on Friday following a mixed bag of earnings. Goldman Sachs (GS) and Morgan Stanley (MS) are expected to report their calendar fourth-quarter earnings tomorrow.
Is GS Stock a Good Buy?
Analysts remain cautiously optimistic about GS stock with a Moderate Buy consensus rating based on 12 Buys and seven Holds. Over the past year, GS stock has gone up by 10%, and the average GS price target of $404.56 implies an upside potential of 7.1% at current levels.
