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.
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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