Next year could set an M&A record. One Wall Street bank may benefit most
Surging merger and acquisition activity will provide a significant tailwind behind Goldman Sachs ‘ revenue growth, according to Bank of America. In a Monday note, analyst Ebrahim Poonawala reiterated his buy rating on the Wall Street investment bank and hiked his 12-month price objective to $900 from $850. Shares of Goldman Sachs have surged 51% this year, touching a new all-time high of $870.56 on Monday. Poonawala’s revised price forecast implies 5% upside for bank from current levels. GS YTD mountain GS YTD chart Poonawala wrote in the note to clients that a record M & A cycle next year could drive Goldman’s full-year earnings for 2026 above $60 per share. M & A activity has already picked up this year. On Monday, IBM made an $11 billion deal to buy Confluent and Paramount Skydance began a hostile takeover offer for Warner Bros. Discovery in a $30-per-share offer, just months after itself buying Paramount. All signs point to the momentum continuing next year with an easier monetary policy from the Federal Reserve and less regulation of business and federal oversight from the Trump administration. “We see potential for [Goldman’s] 2026 EPS to surpass the prior high in 2021 on the back of a record year for M & A activity and significant capital flexibility to support M & A financing,” Poonawala wrote. “Supporting this are a conducive regulatory backdrop for deal approval (DOJ/FTC), declining interest rates and pent-up desire for strategic transactions and sponsor activity.” Goldman management itself also seems to have moved into a period of acquisition activity, the analyst said, citing the bank’s deal to buy exchange-traded fund firm Innovator Capital Management for $2 billion . “After spending the better part of the last decade on capital optimization, management is in capital deployment mode,” he wrote. “Bar for larger M & A high, evident in last week’s announced ~$2bn acquisition of Innovator Capital to boost positioning in the active ETF space. This follows the T. Rowe partnership on target-date funds and the acquisition of Industry Ventures, a leader in secondary investments.”
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