Goldman Sachs and Morgan Stanley’s stocks have declined in the last two sessions, with Thursday’s earnings being a deciding factor on whether these banks would snap the losing streak or continue the declines.
- Goldman Sachs is expected to post a revenue of $14.23 billion during the fourth quarter by Wall Street analysts, according to data compiled by Fiscal AI.
- Analysts expect Morgan Stanley's revenue to be $17.67 billion and earnings per share to be $2.38.
- Wall Street investors and analysts are eyeing Goldman Sachs and Morgan Stanley’s comments on their plan to respond to the proposed credit card interest-rate cap.
In a swirling week for investors holding big bank stocks following U.S. President Donald Trump’s comments regarding a credit card interest rate cap. The earnings so far have been a sigh of relief, with Bank of America and JPMorgan Chase & Co. posting better-than-expected profits for the quarter.
Last week, Trump said that he was considering a one-year cap of 10% on credit card interest rates, calling current rates of 20% to 30% “excessively high,” a move that has resulted in Bank of America and JPMorgan stock seeing red for three straight days. However, Goldman Sachs and Morgan Stanley’s stocks have only declined in the last two sessions.
Goldman Sachs stock was down marginally while Morgan Stanley’s shares rose 0.4% in premarket trading ahead of results before markets opened on Thursday.
Earnings View
Goldman Sachs is expected to post a revenue of $14.23 billion during the fourth quarter by Wall Street analysts, according to data compiled by Fiscal AI. The company's earnings per share are estimated to be $11.57 for the quarter. Analysts expect Morgan Stanley's revenue to be $17.67 billion and its earnings per share to be $2.38.
Last week, HSBC said that bank stocks have pulled back, offering selective opportunities to add exposure, which raised the firm's 2025-26 adjusted EPS estimates among the group by about 1% to 7% to incorporate higher net interest income, investment banking fees, and share repurchase estimates.
After Bank of America’s earnings, Aptus Capital Advisors Head of Equity and Portfolio Manager David Wagner said that Bank of America is seen as the “North Star” to reconcile the health of the consumer, especially as the market has witnessed some cracks in the labor market.
Credit Card Rate Cap
Wall Street investors and analysts are eyeing Goldman Sachs and Morgan Stanley’s comments on their plan to respond to the proposed credit card interest-rate cap. Bank of America’s Brian Moynihan said that if one brings the caps down, “you're going to constrict credit, meaning less people will get credit cards.”
“And the balance available to them on those credit cards will also be restricted and so you have to balance that against what you're trying to achieve from the affordability,” Moynihan said.
JPMorgan’s Chief Financial Officer, Jeremy Barnum, also echoed similar sentiments, saying people will lose access to credit on “a very, very extensive and broad basis,” especially those who need it most, ironically.
How Are Retail Traders Reacting?
Retail sentiment on Goldman Sachs improved to ‘bullish’ from ‘neutral’ territory a day ago, with message volumes at ‘high’ levels, according to data from Stocktwits.
While sentiment on Morgan Stanley remained unchanged in the ‘bullish’ territory, with volumes of messages at ‘high’ levels.
Shares of Goldman Sachs have gained nearly 52%, and Morgan Stanley stock has jumped over 33% in the last 12 months.
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