We're raising our price target on Goldman Sachs after a blowout quarter, upbeat outlook

An important development from the financial markets: Goldman Sachs reported a blowout quarter Tuesday, fueled by booming activity on Wall Street, sending shares to fresh all-time highs. The stellar results, coupled with CEO David Solomon's rosy outlook, reinforce our desire to own the investment banking giant in a moment tailor-made to its strengths. Revenue in the second quarter rose 39.

5% year over year to $20. 34 billion, crushing the consensus of $16. 13 billion, according to LSEG.

Economic Details

Earnings per share (EPS) in the three months ended in June surged 92% to $20. 98, a huge beat versus the $14. 48 consensus, according to LSEG data.

Shares of Goldman jumped 7. 5% and are on pace for their best single-day move in over a year. The stock also set a new intraday record high of roughly $1,136 apiece.

To close at a record, Goldman needs to end the day above $1,106. 37, its current closing peak set on June 22. GS 1Y mountain Goldman Sachs 1-year return Bottom line Expectations were high for Goldman Sachs, which during the period co-led SpaceX's record-breaking initial public offering, helped steer Alphabet's enormous secondary stock sale, and advised on the $67 billion NextEra-Dominion Energy merger .

Analyst Views

Plus, the stock market had a big rebound from its Iran war lows, while oil prices and bonds whipsawed — an ideal backdrop for Goldman's trading desks, which thrive on volatility. Despite all these well-known wins, Goldman still blew past estimates. Jim Cramer summed it up like this: Everyone expected a good quarter, "but not this good.

" Goldman's three most important businesses — investment banking, trading, and asset and wealth management — all exceeded consensus revenue expectations, unlike in the first quarter of this year, when only investment banking delivered a clean beat. Additionally, key metrics used to evaluate a bank's performance were also much better than expected. In particular, Goldman's efficiency ratio — calculated by dividing the firm's expenses by its revenues — was 57.

4%, a multiyear low (lower is better here). Return on tangible common equity, a measure of how efficiently the bank generates profits from its capital, was 25. While the second quarter featured some extraordinary deals, Goldman struck an upbeat tone on the pipeline of future activity — and that's notable for anyone worried about the sustainability of the performance.

Economists are analysing what the news means for the markets.