The Goldman Rush

goldman sachs ceo david solmon
Goldman C.E.O. David Solomon, now into his sixth year at the helm, has seemingly overcome the doubters after he abandoned many of Goldman’s ill-advised experiments in retail banking and finance Photo: Cyril Marcilhacy/Bloomberg via Getty Images
William D. Cohan
June 16, 2024

Goldman Sachs is back, baby! Or at least that’s the conclusion of Mike Mayo, the influential Wall Street analyst at Wells Fargo, and it’s hard to disagree. Twenty-five years after the firm’s May 1999 I.P.O., Goldman’s stock is trading at or near its all-time high, and has a market value of almost $150 billion, narrowing the once-yawning valuation gap with rival Morgan Stanley to around $10 billion. Goldman’s first-quarter performance delighted Mayo and other Wall Street research analysts, and the outlook for the rest of the year seems bright, given the pickup in the financing and M&A markets. “They’re crushing it in their legacy business, global banking and markets, and that’s two-thirds of the company,” Mayo told me. “And the other one-third of the company, which is wealth and asset management, is on its way toward a mid-teens return.”

After years of the chattering class questioning his leadership, Goldman C.E.O. David Solomon, now into his sixth year at the helm, has seemingly overcome the doubters after he abandoned many of Goldman’s ill-advised experiments in retail banking and finance—their “hobbies,” as Mayo called them. Instead, Goldman is back to being Goldman, which means focusing on investment banking—M&A advisory and underwriting stocks and bonds—trading, principal investing (but not so much as to upset the regulators), and wealth and asset management. “If the capital markets recover,” Mayo said, “we have increased confidence that Goldman will take its fair share.” He added the Goldman stock, trading at around $450 a share, is within 10 percent of his price target. “There’s still some upside,” he said, “but it’s not the table pounder it was when it was trading at $300 a share.” (Mayo’s investment advice, not mine.)