Goldman Sachs reported strong but impressive first-quarter results on Monday, and the stock started the trading week lower. It hasn’t helped that tensions are rising again with the war with Iran, but all the reasons we own the stock are still intact. Revenue for the first quarter ended March 31 rose 14.4% to $17.23 billion, beating LSEG’s estimate of $16.97 billion. According to LSEG, earnings per share (EPS) increased 24.3% year over year to $17.55, beating expectations of $16.30. Goldman shares fell more than 2% in afternoon trading to about $886 per share. At the session low, the stock was down more than 4.5%. The market as a whole has been steadily rebounding after opening the day with a slight decline. This overall market improvement certainly helped Goldman’s stock rally from its lows as investors focused on the failure of the weekend’s peace talks. GS YTD Mountain Goldman’s year-to-date stock price performance. Conclusion We’re unfazed by Goldman’s stock decline and see it as a buying opportunity once the dust settles on this week’s jam-packed bank earnings calendar. Jim Cramer explained in the morning meeting why he doesn’t recommend a Monday dive buy. He said he preferred to wait a few days for other banks to report and for Goldman’s stock price to stabilize. And he said he would take action. Obviously, this is not the price action we want to see in our report, but it does make us feel pretty good about last week’s sale. So why do we have such a positive outlook despite imperfect results? There was a lot to like inside, from the strength of its most important investment banking function to improved scores on key banking metrics (more on that later). This gives us confidence that Goldman is in a strong position, especially if the oil price spike is temporary and the war with Iran ends in weeks rather than months. If we’ve learned anything since the beginning of this conflict, it’s that the U.S. economy is far better able to cope with rising oil prices than we thought. In fact, Goldman Sachs analysts said in late March that “our economists expect U.S. real GDP growth to exceed 1% this year, even in the highly unfavorable scenario of oil surging above $150, disruptions to distribution through the Strait of Hormuz continuing into May, and production ‘scars’ impacting supply even after distribution begins to normalize.” So, unless you are of the view that the situation is going to get worse before it gets better, it would be wise to view this as an opportunity, as the subsidence of tensions should help banks free up their large trading balances. It’s also worth noting that several large deals were announced at the end of the first quarter, even as the conflict remains raging. We hope this is an encouraging harbinger of what’s to come once tensions ease. Additionally, there is some evidence that the number of IPO filings has already increased in April. At the heart of our Goldman thesis is the firm’s ability to make deals as the Trump administration has taken a more relaxed approach to mergers than the previous administration and the IPO market is thawing. “While market conditions have broadly hindered IPO execution and sponsorship, we believe activity levels will recover once conditions stabilize,” CEO David Solomon said in a conference call Monday. “As you may recall, our backlog ended 2025 at its highest level in four years. Despite generating very strong revenue, our end-of-quarter backlog remained extremely strong.” Asked about the M&A environment given the geopolitical turmoil, Solomon doubled down on his bullish outlook. Taking a closer look at Solomon’s response: “The environment for investment banking activity continues to be incredibly strong, especially M&A activity. And as I talk to CEOs, I think of course they’re paying attention to what’s going on geopolitically. But it’s also driven by the fact that they’re seeing opportunities and focusing on driving scale-up and scale-up for businesses where innovation is significant during this time. And that’s frankly better than some companies.”The geopolitical risk is there because they have the opportunity to do consolidation deals…and we continue to see significant activity on the M&A side…Unless the overall environment gets much worse, there’s no question that IPO activity has slowed down a little bit, especially in March, where I think the stock market has been very robust. And if that resilience continues, I think IPO activity will accelerate again. ” We already mentioned the better-than-expected sales and earnings, both of which were the second-highest results in the company’s history. However, there are many other things I like. For example, the bank’s efficiency ratio fell to 60.5% compared to the same period last year (lower is better here), in line with expectations. We expect earnings to continue to decline, as this speaks volumes about future earnings potential. This ratio is calculated by dividing the bank’s expenses by its revenue. Additionally, the company’s return on tangible common equity significantly exceeded expectations, increasing 330 basis points year over year. A basis point is equal to 0.01%. The CET1 ratio, an indicator of a bank’s financial strength, was lower than expected at 12.5%. Nevertheless, this is still comfortably above the 10.9% minimum required by U.S. banking regulators, indicating that Goldman has plenty of room to make growth-oriented investments and return cash to shareholders. On the topic of shareholder returns, Goldman repurchased $5 billion worth of stock in the first quarter, a notable increase from about $3 billion recently. Based on these results, the Company reiterates its target price of $1,050 per share. Rating remains 2. This means buying on a rebound. Since last week’s trim, our rating is 2. Segment Performance Goldman’s Global Banking and Markets division posted record quarterly revenue, up 18.6% from a year earlier to $12.74 billion, well above expectations. Revenues in Investment Banking, its largest division, increased 48% year over year, driven by an 89% increase in advisory revenue, further boosted by a 45% increase in equity underwriting fees and an 8% increase in debt underwriting fees. Equity revenue increased 27% year over year, a new company record, driven by record equity finance revenue. Fixed income, currencies and commodities (FICC) revenue was one of the report’s blemishes, coming in at $4.01 billion versus the consensus of $4.83 billion, according to FactSet. Overall, FICC’s revenue was down 10% year over year. However, it rose 29% quarter-on-quarter as uncertainty stemming from the Iran war (software and private credit concerns that have driven the market this year) led to an aggressive repositioning of customer portfolios. On the conference call, Solomon said that while the introduction of AI may be disrupting some parts of the market (think enterprise software), it is also causing companies to turn to Goldman for help with strategic deals. Examples Solomon cited include Unilever’s $43 billion deal with McCormick, Cisco’s acquisition of Jetro, and the Devon Energy-Coterra Energy merger. All three of these deals were announced in the first quarter. Turning to the wealth and asset management division, revenue increased 10% year-over-year to $4.08 billion, just short of the consensus of $4.36 billion. Compared to the same period last year, the segment benefited from a 14% increase in management and other fees due to higher assets under supervision (AUS). Australia grew by $44 billion during the quarter, resulting in a record $3.65 trillion in assets under management at the end of the quarter. Meanwhile, private banking and lending revenue declined 12% year over year as deposit spreads on Marcus Bank accounts narrowed, although deposit growth helped offset the interest rate impact slightly. Goldman’s Platform Solutions division’s revenue, by far the smallest of the three divisions, was also down significantly year-over-year, at $411 million. However, as a reminder, this is because the company previously wisely sold Apple’s credit card business to JPMorgan as part of its overall retreat from mass-market consumer ambitions. (Jim Cramer’s Charitable Trust is a long GS. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. 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