Goldman Sachs (GS) is set to report earnings before the market opens on Tuesday, September 16. Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals.
GS is expected to earn a profit of $1.78 cents per share for its 3rd quarter. Since Goldman understands the concept of managing their earnings expectations, we expect the broker to announce earnings that will beat investors’ and analysts’ expectations as GS just doesn’t miss too often.
The Correct Call suspects that Goldman’s guidance could be light moving forward as investment banking, mergers, stock trading… have all suffered badly in the last quarter. This has not been overlooked by analysts as the consensus estimate has dropped from $2.13 7 days ago to the current consensus. The estimate started the quarter at $3.63.
Technical Analysis of Goldman Sachs
Recently the stock price has established a series of lower lows and lower highs. This downtrend is evidenced by a breakdown in all the moving averages. In March, GS set a closing low of $150.45. An earnings announcement that misses or with tempered guidance could push GS shares to new lows. On the other hand, if Goldman does exceed and sooth Wall Street with a sunny outlook, the shares are coiled and could spring for a nice gain.
We, as you can probably tell, expect Goldman’s stock price to be volatile following its quarterly check up. Super aggressive investors might consider an options straddle using September Call and Put options. The options expire next Friday, so this strategy is not for the faint of heart.
The September 160 Call Options last traded at $9.10 per contract and The September 160 Put options last traded at $6.90 per contract. If the stock moves up by $6.90 or down $9 or more, investors will make money. We think in light of the current conditions in the financial sector, Lehman, Bear, Freddie, Fannie… Goldman’s shares will move at least 5-10% in either direction following its 3rd quarter call.
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