(New York)
Goldman Sachs was the stock of the year in 2019. It was the best performing stock in the Dow, gaining more than 37% in the year. The bank started the year poorly with its 1MDB scandal, but as the year went on, David Solomon’s (the bank’s new CEO) leadership started to help the stock. The bank settled the issues and its earnings improved. It also made a large push into consumer finance as part of an effort to diversify its business and become a “modern, digital consumer bank”. The bank, through “Marcus”, its new consumer lending unit, is offering consumer savings products, while Goldman itself is partnering with Apple on the company’s new credit card.
FINSUM: In our view, Goldman’s stock price outlook is very linked to the big new push it is making in consumer finance. Its core business will likely continue to perform as it has, so the real difference maker will be its new business lines and the success of its “modernization”.
