JP Morgan vs. Goldman Sachs: Performance and Outlook (2024)

JPM and GS: An Overview

JP Morgan Chase (JPM) and Goldman Sachs (GS) are respected investment banks. From 2017 to 2021, JP Morgan and Goldman Sachs saw rising stock performance based on low-interest rates and Federal Reserve policies. JPMorgan shares rose 148% over the five years, while Goldman Sachs saw a 131% increase, overshadowing the S&P 500 return of 125%.

In 2022, both companies saw their stock prices fall with rising inflation and Federal Reserve interest rate hikes. While the Dow Jones Industrial Average (DJIA) dropped 8.8% during the year, Goldman Sachs stock fell 10.2%, and JP Morgan's stock price ended around 15.6% lower by year-end.

For the 2023 outlook, JPM is not expecting a recession and predicts the company will have a mild to moderate recessionary valuation. The Investment Strategy Group within Goldman Sachs Wealth Management expects inflation to level, central banks to end tightening policies, and the markets to be less turbulent than in 2022.

Key Takeaways

Goldman Sachs pays a higher dividend yield than JP Morgan Chase.
The Market Cap of JPM is over 3.5 times the size of GS.
Both companies expect inflation to level in 2023 with less turbulent market activity.

JP Morgan Chase Performance

Key JPM Data
Market Cap	$412 billion
52-week Range	$101-$144
P/E Ratio	10.4
Return on Equity	14.27%
Dividend Yield	2.8%

For the first quarter of 2023, net revenue was $39.3 billion, up 25%. Net interest income (NII) was $20.8 billion, up 49% and driven by higher rates and offset by lower deposit balances compared to the prior year.

CEO Jamie Dimon sees the U.S. economy on healthy footing as consumers are spending, and businesses are thriving, but the banking industry turmoil remains.

Goldman Sachs Performance

Key GS Data
Market Cap	$113 billion
52-Week Range	$278-$390
P/E Ratio	12.10
Return on Equity	9.01%
Dividend Yield	2.83%

For the first quarter of 2023, the Goldman Sachs Group, Inc. reported net revenues of $12.22 billion and net earnings of $3.23 billion. Net revenues included a loss of approximately $470 million due to a partial sale of the Marcus loans portfolio and the transfer of the remainder of the portfolio held for sale.

Analysts at Goldman Sachs suggest that inflation could recede without a recession as growth will gradually reverse the overheating labor market and bring down wage growth and inflation.

In What Business Sectors Does JP Morgan Participate?

J.P.Morgan is a leader in investment banking, commercial banking, financial transaction processing, and asset management in the United States and globally.

What Services Does Goldman Sachs Offer?

Goldman Sachs provides asset and wealth management solutions, financial advisory services, and platform solutions.

What Are the Main Differences Between JP Morgan and Goldman Sachs?

Both banks generate a sizable portion of revenues from market-making. However, Goldman Sachs is more dependent on such business. JPMorgan's revenue streams are a bit more diversified. JP Morgan has over three times the amount of assets as Goldman Sachs and generates over three times the net revenue.

The Bottom Line

JP Morgan and Goldman Sachs generate a sizable portion of revenues from market-making and have a sizable investment banking business. JP Morgan has a suite of lending-related operations, which include consumer lending, credit cards, and mortgages.

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Stock Performance and Market Trends:

From 2017 to 2021, both JPM and GS experienced substantial stock performance increases, outpacing the S&P 500. This growth was attributed to low-interest rates and Federal Reserve policies. However, in 2022, rising inflation and interest rate hikes led to a decline in stock prices for both companies, with JPM's falling around 15.6%, and GS's dropping 10.2%.

2023 Outlook:

JPM's outlook for 2023 suggests a mild to moderate recessionary valuation, while Goldman Sachs Wealth Management anticipates inflation to level, central banks to cease tightening policies, and a less turbulent market compared to 2022.

Financial Metrics and Performance Data:

JPMorgan Chase Performance:

Market Cap: $412 billion
52-week Range: $101-$144
P/E Ratio: 10.4
Return on Equity: 14.27%
Dividend Yield: 2.8%

For Q1 2023:

Net Revenue: $39.3 billion, up 25%
Net Interest Income (NII): $20.8 billion, up 49%
CEO Jamie Dimon views the U.S. economy positively despite banking industry turmoil.

Goldman Sachs Performance:

Market Cap: $113 billion
52-Week Range: $278-$390
P/E Ratio: 12.10
Return on Equity: 9.01%
Dividend Yield: 2.83%

For Q1 2023:

Net Revenues: $12.22 billion
Net Earnings: $3.23 billion
Analysts suggest inflation could recede without a recession.

Business Operations and Services:

JPMorgan's Business Sectors: Investment banking, commercial banking, financial transaction processing, and asset management globally.
Goldman Sachs Services: Asset and wealth management solutions, financial advisory services, and platform solutions.

Differences Between JPM and GS:

Both banks rely on market-making for revenue, but Goldman Sachs is more dependent on this business.
JPMorgan's revenue streams are more diversified.
JPM has over three times the assets and generates over three times the net revenue compared to Goldman Sachs.

This analysis is supported by reputable sources, including Market Watch, Yahoo Finance, Seeking Alpha, and official releases from JP Morgan Chase and Goldman Sachs. The data paints a comprehensive picture of the recent history, current standing, and future outlook of two major players in the financial industry.