Citigroup Inc.

🇺🇸New York Stock Exchange
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Citigroup Inc. stock analysis C overview
Somewhat Bullish +50

What I'm Watching With Goldman Sachs to See if It Beats the Market

🏦 Goldman Sachs continues to outperform major rivals like JPMorgan Chase and Morgan Stanley, with its stock returning roughly 53% last year versus the average annualized return of about 39% over the past three years.

💰 In the fourth quarter, Goldman Sachs generated $2.58 billion in investment banking revenue, representing approximately 19% of total revenue, compared to 13% for Morgan Stanley and just 5.5% for JPMorgan Chase.

🤝 The bank's strength lies in mergers and acquisitions (M&A), ranking at or near the top in metrics like deal volume, fees, and value, which drives its outperformance when this sector is hot.

📊 M&A deal values rose 43% in 2025 compared to 2024, marking the best year for M&A since 2021, while 2024 served as a recovery year following poor performance in 2022 and 2023 due to high interest rates.

🚀 Current momentum into 2026 is supported by lower interest rates, pent-up demand, and companies seeking to acquire AI capabilities, all contributing to record M&A deal volume in the first quarter.

🗓️ Goldman Sachs will report Q1 earnings on April 13, serving as an industry bellwether with investment banking results expected to drive the stock following the strong start to the quarter.

💹 Trading at a relatively reasonable 15 times earnings, the market anticipates that robust Q1 results could give the stock a boost and help it beat broader market returns in 2026.

📉 Citigroup currently outperforms Goldman Sachs in this year's volatile market environment, with the financial giant down only 1.8% while other major rivals have suffered more declines.

🏆 The Motley Fool Stock Advisor analyst team has identified 10 stocks they believe are better buys than Goldman Sachs Group, suggesting it was not included in their top current recommendations.

📈 Historical returns cited by Stock Advisor include a potential $533,522 from a 2004 Netflix recommendation and $1,089,028 from a 2005 Nvidia recommendation as examples of long-term outperformance potential.

🔍 While Goldman Sachs dominates investment banking revenue concentration, its peers maintain strong competitiveness in total deal numbers and overall financial stability during market downturns.

Bullish Signals
  • Goldman Sachs generated $2.58 billion in investment banking revenue in the fourth quarter, representing about 19% of its total revenue.
  • The company posted a record for M&A deals in the first quarter, signaling strong momentum and pent-up demand.
  • In the past three years, Goldman Sachs has an average annualized return of about 39%, beating all other major financial services giants.
  • Even in a volatile market this year, Goldman Sachs is only down about 1.8%, which is the best performance in its class other than Citigroup.
  • Goldman Sachs ranks at or near the top of the list for key metrics including number of deals, fees, revenue, and value of deals.
  • The investment banking momentum continues with M&A deals off to a record start in Q1 2026, driven by lower interest rates and AI-driven acquisitions.
  • With Goldman Sachs trading at a reasonable 15 times earnings, strong expected results could help the stock beat the market in 2026.
Risk Factors
  • Goldman Sachs missed out on being included in The Motley Fool Stock Advisor's list of 10 best stocks to buy now, despite its strong performance.
  • Goldman Sachs underperformed some of its rivals during the bad years of 2022 and 2023 when interest rates soared.
  • The company is currently trading at a 'fairly reasonable' 15 times earnings, which may limit upside potential compared to higher-growth opportunities identified by Stock Advisor.
  • While Q1 investment banking revenue was strong in the past quarter, the article notes that 2024 was 'nowhere near as good', indicating volatility in the investment banking sector.
Full Analysis
The article evaluates Goldman Sachs Group (NYSE: GS) as a potential market outperformer based on its strong investment banking fundamentals and recent performance history. Over the past three years, Goldman has achieved an average annualized return of about 39%, significantly exceeding competitors like JPMorgan Chase, Morgan Stanley, Citigroup, and Bank of America. Last year alone, the stock returned approximately 53%. Even in the volatile current market conditions of early 2026, it has declined only 1.8%, trailing only Citigroup in that metric within its sector. The key differentiator driving this outperformance is Goldman’s reliance on investment banking and mergers and acquisitions (M&A), which generated $2.58 billion or 19% of total revenue in the fourth quarter, compared to 13% for Morgan Stanley and just 5.5% for JPMorgan Chase despite similar absolute revenues. Recent M&A activity has been robust, with 2025 marking the strongest year since 2021, seeing deal values rise 43% over 2024. The momentum continues into 2026, evidenced by a record start to the first quarter in M&A deals, driven by factors such as lower interest rates, pent-up demand, and companies seeking artificial intelligence capabilities. Goldman Sachs is positioned to benefit from this environment, with earnings expected to be reported on April 13 when it releases its results. The company currently trades at a valuation of about 15 times earnings, and the anticipated strong investment banking performance could provide a positive catalyst for its stock in 2026, serving as a bellwether for the broader financial industry. Despite these positive indicators, the article notes that Goldman Sachs was not included in The Motley Fool Stock Advisor's top 10 list of recommended stocks for buying now. This recommendation contrasts with historical performance where specific stocks on the list, such as Netflix and Nvidia at the time of recommendation, generated substantial returns; for example, a $1,000 investment in Nvidia recommended on April 15, 2005, would have grown to $1,089,028 by April 7, 2026. The Stock Advisor list claims a total average return of 930%, significantly outperforming the S&P 500’s 185% return over the same period, suggesting alternative investment opportunities may have higher growth potential compared to the current valuation and outlook of Goldman Sachs.