GS

Goldman is firing on all cylinders fundamentally. FY2025 net income of $17.2B (+20.3% YoY) and diluted EPS of $51.32 (+26.6%) cap a powerful three-year recovery from the 2023 trough, where net income had collapsed to $8.52B from $21.6B in 2021. A 4.9% reduction in shares outstanding — funded by $12.4B of buybacks (+54.5%) alongside $5.28B of dividends (+17.3%) — is amplifying per-share earnings faster than headline profit, exactly the capital-return flywheel you want from a mature, cash-generative franchise. Retained earnings grew 7.7% to $165B and stockholders' equity sits at $125B, so the firm is returning cash without eroding its capital base. ROE of 13.7% is solid for a balance-sheet-intensive dealer.

The problem is the price you pay for it. At $1,076.91, GS trades at 21.0x FY diluted EPS — a rich multiple for a business whose earnings are demonstrably cyclical and, on this evidence, near a cyclical high. The net-income history is the tell: $21.6B → $11.3B → $8.52B → $14.3B → $17.2B. Profits here can halve in a downturn, and the 10-K's own Risk Factors lead with exactly that exposure — businesses 'adversely affected by conditions in the global financial markets,' market-making sensitivity to 'changes in the levels of market volatility,' and investment-banking/wealth revenues hostage to investor and CEO confidence. Paying 21x for trough-prone earnings means the multiple is doing the discounting, not the fundamentals.