11:51 AM EDT, 10/16/2024 (MT Newswires) -- Goldman Sachs Group's ( GS ) stock is expected to outperform due to a positive cycle of earnings per share revisions and a more resilient return on equity, BofA Securities said in a note emailed Wednesday.

Strong trading revenue and recovering investment banking activity should drive positive EPS revisions, likely leading to further price-to-earnings multiple expansion, according to the note.

"Increased confidence on rebounding mergers and acquisitions/initial public offering activity should drive continued investor interest in adding exposure to the stock," BofA said. A potential deregulatory agenda that could boost M&A activity following the US elections could also be an additional catalyst for the stock, it added.

Goldman Sachs ( GS ) also appears to be in the middle of a "structural shift" for a more resilient return on equity that should be driven by "reduced drag" associated with the consumer business, improving returns from the asset and wealth management segment and rebounding investment banking activity, BofA said.

The company's Q3 results exceeded expectations on stronger capital markets activity, with a 20% year-over-year growth in investment banking revenues, according to the note.

BofA revised its Q4 and fiscal 2025 EPS estimates on Goldman Sachs ( GS ) to $8.09 and $41.68, respectively, from $7.44 and $40.40.

Shares of Goldman Sachs ( GS ) were up 1.9% in recent trading.

Price: 532.23, Change: +9.85, Percent Change: +1.88