Goldman Sachs Group, Inc. (NYSE:GS) stock fell Wednesday despite strong third-quarter 2026 results, as hotter-than-expected inflation triggered a broader market selloff and renewed concerns about further interest rate hikes.
September consumer prices rose 3.7% year over year, exceeding the 3.6% forecast. Core inflation also topped expectations, raising the likelihood of another Federal Reserve rate hike and pushing Treasury yields higher.
Adding to the pressure, two Wall Street analysts lowered their price forecasts for Goldman Sachs following its quarterly results.
Analysts Trim Goldman Sachs Price Forecasts
On Tuesday, RBC Capital Markets analyst Gerard Cassidy lowered his price forecast to $1,010 from $1,220 while maintaining a Sector Perform rating.
Despite the reduction, Cassidy highlighted Goldman Sachs’ strong capital markets performance. Revenue rose 23% year over year to $18.7 billion, while adjusted earnings of $18.01 per share exceeded RBC’s $13.04 estimate and the $12.86 consensus.
Equities revenue surged 72% to $6.4 billion, driven by record financing revenue. Investment banking fees increased 21% to $3.2 billion, although the deal backlog declined sequentially.
Meanwhile, asset and wealth management revenue climbed 14% to $5.1 billion, supported by record management fees and $97 billion in long-term net inflows.
Stronger Earnings Outlook Despite Lower Valuation
Cassidy also raised his 2026 earnings estimate to $72.45 from $65.10 and his 2027 estimate to $74 from $72.39.
The upward revisions reflect stronger revenue expectations, partly offset by higher expenses. However, RBC’s lower valuation incorporates its return-on-equity assumptions, projected book value and Treasury yields.
Separately, on Wednesday, Keefe, Bruyette & Woods analyst Christopher McGratty maintained a Market Perform rating on Goldman Sachs but reduced his price forecast to $1,100 from $1,130.
GS Price Action: Goldman Sachs Group shares were down 2.13% at $872.95 at the time of publication on Wednesday, according to Benzinga Pro data.
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