Goldman Sachs just had the best quarter in its 157-year history. EPS of $20.98 nearly doubled what the firm earned a year earlier. Revenue hit $20.34 billion, a 39% jump. The equities desk alone brought in $7.42 billion. The stock surged more than 8% on those results in July to trade near $1,140.

Then yields rose. Now GS sits at roughly $895, about 22% below that peak. Q3 earnings land Tuesday morning, October 13, before the open.

Why This Stock Now

The gap between what Goldman proved in Q2 and what the market is currently willing to pay for it is the opportunity. The stock trades at approximately 13.8 times trailing earnings against a trailing EPS of around $64.80. The consensus price target sits around $1,063, roughly 19% above today’s close. That’s not a speculative gap. It reflects an earnings machine whose multiple has compressed almost entirely because of rate sensitivity in the broader financial sector, not because the business deteriorated.

Goldman’s first-half 2026 makes the underlying case plainly. Net revenues of $37.57 billion and net earnings of $12.26 billion for just six months. Equity underwriting surged 130% year-over-year in Q2. Debt underwriting rose 75%. Advisory fees climbed 17%, supported by a pace of M&A advising that cleared $1.2 trillion in announced deal volumes in the first half alone.

What Q3 Needs to Show

Consensus estimates for Tuesday cluster around $12.90 to $15.18 per share on roughly $16.9 to $17.4 billion in revenue. The step down from Q2’s $20.98 reflects normal seasonality. Goldman CEO David Solomon said at Barclays’ global financial services conference in September that FICC trading was slightly softer relative to equities.

The Q3 test is not whether Goldman matches Q2. It’s whether Goldman’s equities franchise, asset and wealth management fees, and investment banking pipeline are durable enough to justify a valuation reset. Total assets under supervision surpassed a record $4 trillion in Q2. Management and other fees reached a record $3.4 billion, up 20% year-over-year. Those streams don’t swing with a single quarter’s trading volume.

What Could Go Wrong

The bear case is not subtle. The 10-year Treasury yield is running near 5.2%, which makes a 13.8x multiple on a cyclical investment bank feel exposed. If dealmaking slows further in Q4 as geopolitical uncertainty persists, the full-year EPS estimate near $69.64 may face downward pressure. Reuters reported in late June that Oppenheimer downgraded Goldman to Underperform on valuation grounds earlier this year.

Insider selling and the Federal Reserve’s updated bank stress-testing framework add friction. If the Q3 report misses or management guides Q4 cautiously, the stock has room to pull back toward $858 technical support.

The Bottom Line

Goldman Sachs reports in two days with the stock sitting 22% below the peak it hit after the most profitable quarter in its history. The Q2-to-Q3 step-down is priced in. What isn’t fully priced in is whether Goldman’s record asset management fees, equities dominance, and recovering M&A calendar can sustain 35% full-year earnings growth. If Tuesday’s report confirms the business held through the summer, the case for closing the gap to around $1,063 becomes considerably more concrete.