The Goldman Sachs Group, Inc. GS

Because the market now expects a near-21% return on tangible equity to last. Goldman reported a 21.3% annualized return on tangible equity in Q1 2026 against a tangible book value of $336 a share, and a bank that sustainably earns that much is mathematically worth well above one times its book. For most of 2011–2016 the stock traded near or below book — about 0.75x in early 2012 — so the move to roughly 3.2x reflects a genuine re-rating from cyclical trader to durable compounder.

Goldman posted $17.23 billion in net revenues, $5.63 billion in net income and diluted EPS of $17.55 — the second-highest quarter in the firm's history, up about 24% from a year earlier. The engine was Global Banking & Markets at a record $12.74 billion, with equities trading a record $5.33 billion (+27%) and investment-banking fees up 48% to $2.84 billion, partly offset by fixed income falling 10% to $4.01 billion. Asset & Wealth Management added $4.08 billion on record $3.7 trillion of assets under supervision.

Above every one of them. At about $1,063 the stock sits above the ~$945 average analyst target and above the entire published range, which runs roughly $700 to $1,050 across 25 analysts. Even the most bullish call — Bank of America's $1,050 — sits just under the price, and JPMorgan holds a cautious $900. In plain terms, the market has priced the shares beyond where Goldman's own sell-side coverage values them — the price discounts a more permanent re-rating than the analysts are willing to underwrite.

Cyclicality — the record quarter is not a run-rate. Q1's $17.55 EPS was a near-record, yet consensus has the next two quarters fading toward roughly $13.5–$14, a step-down of about 20%. The quarter leaned on the most mean-reverting dollars Goldman earns: a hot equities tape (+27%) and a 48% jump in M&A advisory, while fixed income missed by roughly $830 million. Pay about 19 times trailing earnings and you are paying a peak multiple on a peak number the Street expects to be lower.

By building a fee engine and shrinking its riskiest balance sheet. Asset & Wealth Management reached a record $3.7 trillion of assets under supervision with management fees up 14% to about $3.1 billion — recurring, capital-light revenue — across a 33rd straight quarter of long-term inflows. Goldman also cut on-balance-sheet principal investments more than 90%, from roughly $64 billion toward $6 billion, and exited consumer banking as the Apple Card moves to JPMorgan. Each step trades volatile principal risk for steadier fees.

Goldman now screens between them on book value. At roughly 3.2x tangible book, GS trades above JPMorgan's ~3.0x and below Morgan Stanley's ~4.3x, a striking shift from the decade it traded at a discount to both. The market still awards Morgan Stanley the richest book multiple for its ~$7.5 trillion wealth platform, while JPMorgan carries the lowest P/E (~15.6x) for its steadier universal-bank earnings. Goldman's re-rating has pulled it toward the quality end of the group rather than the cyclical one.