Goldman Posts Solid Growth in Q3 IB Fees: Will the Trend Continue?

The Goldman Sachs Group, Inc. GS reported double-digit growth in its investment banking (IB) revenues in the third quarter of 2025. 

Global mergers and acquisitions (M&As) in the quarter were impressive, rebounding from the lows witnessed in April and May following President Donald Trump’s announcement of sweeping tariffs. Nonetheless, deal-making activities have picked up pace since then as corporates adapted to the rapidly evolving geopolitical and macroeconomic scenarios. They took advantage of a strong U.S. economy, optimism over potential Federal Reserve interest rate cuts, and a more accommodating regulatory environment under Trump.

Driven by higher advisory revenues, signifying a substantial rise in M&A volumes, GS’s IB fee revenues totaled $2.7 billion in the third quarter of 2025, up 42.5% from the prior-year quarter. Specifically, advisory revenues surged 60% year over year, while debt underwriting revenues moved up 30% and equity underwriting revenues grew 21%. Additionally, Goldman ended the third quarter as the leader in both announced and completed M&A, having advised on more than $1 trillion in announced M&A volumes year to date. 

During the third-quarter earnings call, David Solomon, chairman and CEO of Goldman, highlighted improvements in M&A activity throughout the year and expects the constructive environment to persist through the end of 2025, with even stronger M&A activity anticipated in 2026 amid a favorable backdrop.

Overall, the combination of favorable macro conditions, strong client pipelines, and GS's sustained leadership in the M&A advisory will continue to support its IB performance in the upcoming period.

How GS Competes With Peers in Terms of IB Business

Similar to Goldman, its peers Morgan Stanley MS and JPMorgan JPM witnessed solid growth in their IB revenues in the third quarter.

Riding on a frenzy of deal-making activities and IPOs, Morgan Stanley's IB revenues were $2.1 billion in the third quarter of 2025, up 44.1% from the prior-year quarter. Its fixed income underwriting fees rallied 39%, while equity underwriting income surged 80% year over year. Morgan Stanley’s advisory fees jumped 25% year over year to $684 million as completed M&As rose. 

During the third-quarter earnings call, Ted Pick, chairman and CEO of Morgan Stanley, said that the rebound in the operating environment enabled M&A and renewed financing activity. While he remained cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen,” he affirmed that IB activity should trend upward over the next couple of years. 

JPMorgan’s IB fees stood at $2.6 billion in the third quarter, implying 17.1% year-over-year growth. Specifically, JPM’s advisory fees rose 9%, with debt and equity underwriting fees growing 53% and 9%, respectively.

During the third-quarter earnings call, Jeremy Barnum, executive VP and chief financial officer of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment.

Goldman’s Price Performance, Valuation & Estimates

GS shares have gained 34.6% year to date compared with the industry’s growth of 28.7%.

Price Performance

From a valuation standpoint, Goldman trades at a forward price-to-earnings (P/E) ratio of 14.33X, below the industry’s average of 14.38X.

Price-to-Earnings F12M

The Zacks Consensus Estimate for Goldman’s 2025 and 2026 earnings implies a year-over-year rise of 19.6% and 12.4%, respectively. Likewise, the consensus estimate for the company’s 2025 and 2026 sales implies year-over-year rallies of 9.1% and 5.9%, respectively. Earnings estimates for both years have been revised upward over the past seven days.

Estimate Revision Trend

Goldman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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