Goldman Sachs Seen Headed to Steep Earnings Drop

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Goldman Sachs appears headed to another set of weak quarterly earnings as deal-making lags and the bank retreats from a loss-making consumer business.

Goldman is expected to report third-quarter earnings per share of $5.31 when it reports results on Tuesday, according to average estimates compiled by LSEG. That would reflect a 36% decline from its EPS of $8.25 a year earlier.

The company's third-quarter results will be depressed by writedowns of $300 million to $350 million on its commercial real estate assets, analysts wrote, after it set aside $485 million in the second quarter.Goldman Sachs declined to comment ahead of its earnings. CEO David Solomon is scaling down the company's consumer business after it lost $3 billion over three years.

UBS on Wednesday cut its target price for Goldman Sachs to $382 a share from a previous target of $400. UBS still has a buy rating on the stock. The firm has taken a leading role in several initial public offerings this year, including for chip designer Arm Holdings, but its business advising on mergers and acquisitions has remained weak in line with the broader industry, Biggar said.

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