- Full-Year EPS Growth Surged 27% to $51.32 in 2025, with Q4 alone hitting $14.10/share.
- Global Banking Revenue Rose 18% to $41.5 Billion, Driven by 25% YOY Investment Banking Fee Growth in Q4.
- AWM Revenue Hit Record $11.4 Billion, With Pretax Margin Target Raised to 30% for Medium-Term Returns Exceeding 16%.
- Dividend Hike Increased Quarterly Payout to $4.50 (50% YOY), Alongside $32 Billion in Remaining Buyback Capacity.
- Investment Banking Backlog Reached Four-Year High in Q4, With Advisory-Driven Activity Fueling Optimism for 2026 Fee Growth.
Segment Performance
The firm's Global Banking and Markets segment produced record revenues, driven by a 25% year-over-year increase in investment banking fees in the fourth quarter. The Asset and Wealth Management (AWM) segment saw significant growth, with more durable revenues reaching a record $11.4 billion for the year and generating returns in excess of 16% in the segment. AWM's pretax margin target was increased to 30%, which will help drive high-teen returns in AWM over the medium term.
Capital Management and Shareholder Returns
The firm announced a $0.50 increase in its quarterly dividend to $4.5, representing a 50% increase from a year ago, and has $32 billion of remaining buyback capacity under its current share repurchase authorization. The firm returned approximately $4.2 billion to common shareholders in the fourth quarter, including $3 billion in common stock repurchases and $1.2 billion in dividends. Its common equity Tier one ratio was 14.4% at the end of the fourth quarter.
Valuation and Outlook
With a Price-to-Tangible Book Value (P/TBV) ratio of around 1.7x (derived from 'P/B Ratio': 168.59, not directly available), Goldman Sachs is trading at a premium. The 'P/E Ratio' of 17.77 and 'P/S Ratio' of 2.36 indicate that the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 4.5%. David Solomon expects a constructive environment for M&A and capital markets activity, with a likely scenario of a very good year for 2026. The firm's investment banking backlog rose for a seventh consecutive quarter to a four-year high, driven primarily by advisory.
Growth Opportunities
The firm is optimistic about the investment banking outlook for 2026, with a potential increase in overall capital markets activity. The firm's asset and wealth management business is expected to continue growing, with a target of 5% long-term fee-based wealth asset growth. The firm is also exploring emerging opportunities in market structure, including tokenization and prediction markets.