Goldman Sachs Expected to Report $11.65 EPS on $13.79 Billion Revenue

Goldman Sachs is forecast to report $11.65 EPS on $13.79 billion in revenue ahead of the open, while its stock ticked down 0.4% to $928.99 in after-hours trading. Morgan Stanley is expected to post $2.44 EPS on $17.76 billion revenue with a modest after-hours gain, and TSMC reported a 35% year-over-year Q4 profit increase to T$505.7 billion (~$16 billion), its seventh consecutive quarter of double-digit growth. In M&A action, Mission Produce agreed to acquire Calavo Growers at $27 per share, sending Calavo up 12.9% to $25.50 after-hours, and analysts remain bullish on BlackRock with an average 12-month target of $1,356 (11 Buys, 1 Hold) versus a current price near $1,089.54.

Analysis

Market structure: TSMC’s 35% q/q profit surge and seventh consecutive double-digit growth makes TSM (NYSE:TSM) a clear winner in semi-capital allocation and pricing power for advanced nodes; expect suppliers (e.g., high-end equipment) to see order-stickiness while commodity cyclicals remain mixed. Banks/investment banks (GS, MS) face divergent demand — trading and M&A fees are episodic so near-term revenue sensitivity to markets is high; fee-centric managers like BLK benefit from scale and Aladdin’s sticky revenue, implying a 12‑month re-rating if markets stabilize.

Risk assessment: Tail risks include a sharp macro slowdown that knocks TSM demand for AI GPUs (30–50% downside scenario for near-term bookings) or regulatory/antitrust friction in large M&A (CVGW deal pull could erase 5–7% arb spread). Short-term (days–weeks) volatility will be earnings-driven for GS/MS; medium-term (3–12 months) risks are macro funding costs and fee compression; long-term (1–3 years) outcomes hinge on secular asset-gathering for BLK and node transition for TSM.

Trade implications: Favor conviction longs in secular winners (TSM, BLK) sized 2–3% positions with 10–15% stops and 20%+ upside targets over 6–12 months. Avoid naked long GS into the print; instead use event options or pair trades (long BLK, short GS equal notional) to capture fee stability vs trading cyclicality over 3–12 months. Execute small arbitrage (0.5–1% NAV) in CVGW toward the $27 offer but hedge regulatory/financing risk.

Contrarian angles: Consensus underweights the fragility of trading revenue — that argues for underweight GS/MS vs fee businesses; BLK’s 24% implied upside to 1356 (12 months) may be underappreciated if passive flows re-accelerate. The market may be underestimating TSM’s exposure to a single-node demand shock; build size incrementally and use 10–12% trailing stops to avoid skew risk.

Key Decisions for Investors

• Establish a 2–3% long position in TSM (NYSE:TSM), target +20% in 6–12 months, place a 10–12% stop-loss; reason: continued double-digit profits and secular AI-driven wafer demand.
• Initiate a 2% long position in BLK (BlackRock), target $1,356 in 12 months (≈+24%), set a 15% stop; add covered calls (1-year, strike ~1400) to reduce cost basis if volatility allows.
• Avoid initiating >1% outright long in GS into the next earnings print. Instead, use a 14‑day 3% OTM put as asymmetric downside protection or enter an equal‑notional pair trade: long BLK / short GS for 3–12 months to capture fee stability vs trading cyclicality.
• Deploy 0.5–1% NAV in merger arbitrage by buying CVGW up to $26.50 (target $27), require confirmation of financing and no-regulatory-flag within 30 days; predefine exit if spread widens >200 bps or acquirer withdraws.