This week marks the beginning of the third-quarter earnings season for major U.S. financial institutions, with Goldman Sachs and Morgan Stanley among the key players.
Analysts have notably increased their profit forecasts for these firms, with Goldman Sachs seeing a staggering 300% rise in consensus EPS estimates over the past three months, largely due to its involvement in SpaceX's IPO and potential strategic changes in leadership. Analysts expect Goldman to report earnings of $13.07 per share, with an average price target suggesting an 18% upside.
Similarly, Morgan Stanley's EPS estimates have surged by 144% in the last three months, with expectations of $2.94 per share and a projected 15% upside. Investors will be particularly focused on Morgan Stanley's performance in merger and acquisition advisory services and the impact of rising bond yields on its lending and investment activities.
The overall sentiment on Wall Street is optimistic, with many large banks also set to report earnings, reflecting a bullish outlook on the financial sector's profitability