Influential investor Jim Cramer is sticking with Goldman Sachs (GS) and Wells Fargo (WFC) after their Q3 earnings prompted contrasting reactions on Wall Street.
In the most recent Investing Club morning meeting, he identified GS as his “favourite bank stock”, and maintained that WFC remains worth buying despite its mixed quarterly earnings.
Goldman Sachs stock was modestly higher at the time, while Wells Fargo shares were down more than 1%.
Why Jim Cramer is bullish on Goldman Sachs stock
Jim Cramer’s enthusiasm for GS shares rests on the bank’s ability to generate profits beyond initial public offerings (IPOs) and mergers and acquisitions (M&A).
That matters because corporate dealmaking can fluctuate rather sharply with financing conditions and executive confidence. A bank with “several earnings engines” has more ways to deliver when transactions slow.
Goldman Sachs posted Q3 revenue of $18.7 billion on $17.01 per share of diluted earnings (EPS). Its annualised return on common equity (ROCE) came in at 18.7% – highlighting the profitability underpinning Cramer’s preference.
For investors, the appeal is broader than a single earnings surprise.
Trading, financing and investment management give Goldman exposure to different types of client activity. Cramer’s argument is that investors need not depend exclusively on a revival in corporate listings or takeover announcements to see the bank make money.
Note that Wall Street firms also currently rates Goldman Sachs stock at Overweight, with a mean price objective of about $1,084 signaling potential upside of another 23% from current levels.
The bank stock pays a dividend yield of 2.26% as well.
Why Jim Cramer is sticking with Wells Fargo stock
Cramer’s Wells Fargo recommendation requires more patience. While he acknowledged the mixed Q3, the Mad Money host continued to favour buying with a longer investment horizon.
WFC earned $1.87 a share, exceeding the $1.85 consensus, while revenue of MONEY value=”21870000000″ currency=”usd” notation=”long” replace=”false”] missed expectations of $22.3 billion.
The bank’s net interest income also fell short of forecasts – giving shareholders a tangible reason for disappointment.
Yet its operating performance offered encouraging evidence: average loans and deposits each went up about 11% from a year earlier, while wealth and investment management revenue also climbed 12%.
Those figures support a case for continued business expansion – even though the sales miss shows that growth has yet to translate consistently into results that satisfy Wall Street’s expectations.
That said, the analyst community hasn’t bailed on WFC shares either. According to The Wall Street Journal, the consensus rating on the bank stock remains at Overweight, with a bullish mean price target of about $98 indicating potential for a nearly 30% rally from current levels.
A rather lucrative 2.53% dividend yield on Wells Fargo makes it even more attractive as a long-term holding in late 2026.
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