The third-quarter 2026 earnings season is underway, and two major investment banks, The Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C), have reported solid results. Both stocks have underperformed the S&P 500 Index year to date, making them attractive investment opportunities with significant upside potential. Analysts have assigned both stocks a Zacks Rank #2 (Buy).
Goldman Sachs saw strong revenue growth in its Global Banking & Markets and Asset & Wealth Management divisions. The company's improving deal activity and robust equity trading are expected to drive fee-income growth. Goldman Sachs also benefits from growing wealth assets, alternative fundraising, and targeted acquisitions, which should expand its recurring revenues. The stock has a forward P/E of 12.35X, a P/S of 1.81X, and a P/B of 2.04X. Analysts predict a short-term price target range of $875 to $1,280, indicating a maximum upside of 46.2%. Goldman Sachs has a current dividend yield of 2.28%.
Citigroup reported higher net interest income (NII) and is simplifying its operating structure to improve efficiency. The company is expanding its Citi Token Services in Japan and the UAE to support transaction banking growth. Citigroup is also broadening its private-credit and private-market capabilities. The stock has a forward P/E of 10.55X, a P/S of 1.17X, and a P/B of 1.06X. Analysts predict a short-term price target range of $110 to $170, indicating a maximum upside of 40.9%. Citigroup has a current dividend yield of 2.22%.
Both Goldman Sachs and Citigroup have shown strong estimate revisions for the fourth quarter of 2026 and the next year. Goldman Sachs is expected to grow its revenue and earnings by 28% and 10.9%, respectively, for the current quarter. Citigroup is expected to grow its revenue and earnings by 15.9% and 32%, respectively, for the current quarter.