The global macro trends are piling on worries onto businesses across the globe; with the increased hiring spree post-Covid, it seems that the time for layoffs has come, spurred on by rising inflation and worries of a recession.
In particular, Goldman Sachs (NYSE: GS) released its Q2 results roughly one month ago, where revenue and deal activity slumped, among other highlights. Thus, the firm is preparing for a new round of job cuts, according to a The New York Times report.
After the 22.9% year-on-year (YoY) total net revenue drop, less activity in debt and equity underwriting, and reduced mergers and acquisitions (M&A), job cuts were expected. In addition, the macro backdrop of increasing rates, uncertain financial conditions, and the war in Ukraine are all exacerbating the issues the investment bank is facing.
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GS chart and analysis
GS is part of the Capital Markets industry, with 201 other stocks in this industry, outperforming 76% of them. The shares are currently in the middle of their 52-week range, trading from $323.25 and $358.62 over the past month, staying above the moving averages.
Technical analysis indicates a support zone from $326.48 to $334.03 and a resistance zone from $346.62 to $355.86.
Meanwhile, TipRanks analysts rate the shares a moderate buy, with the average price in the next 12 months reaching $392.75, 14.64% higher than the current trading price of $342.58.
Despite the job cuts being on the lower end of 1-5%, according to the report, layoffs are usually not a sign of confidence and continued high growth. Regardless, Goldman Sachs has been a winner in various market conditions.
With the poor performance in Q2 and job cuts, perhaps better entry positions will be available in the future. For now, keeping the stock on a watch list could be the best bet.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
