Renowned market commentator Jim Cramer has labeled Goldman Sachs (GS) as significantly undervalued, citing its current price-to-earnings ratio and dividend yield as compelling indicators. The stock's performance relative to the broader market and its dividend aristocrat peer, SCHD, underscores growing investor interest.
- Goldman Sachs (GS) trades at a forward P/E of 8.9, below the S&P 500 average of 18.3
- GS offers a 3.8% dividend yield, higher than the S&P 500's 2.2% and SCHD's 2.7%
- Fourth-quarter 2025 earnings reached $12.3 billion, up 7% year-over-year
- GS’s 52-week price range is $372.10 to $489.90, with current trading near the bottom
- Trading volume increased 14% over the past week amid rising analyst interest
- Cramer's commentary coincides with two upgrades to 'Buy' from 'Hold' at major investment firms
Jim Cramer, host of CNBC’s 'Mad Money,' recently declared that Goldman Sachs (GS) is 'way too cheap' amid a period of market uncertainty. His remarks come as GS trades at a forward P/E of approximately 8.9, well below the S&P 500 average of 18.3, and offers a dividend yield of 3.8%, outpacing the 2.2% yield of the S&P 500 and the 2.7% yield of the S&P 500 Dividend Aristocrats ETF (SCHD). Cramer emphasized that despite elevated macroeconomic risks, including rising interest rate volatility and geopolitical tensions, GS’s strong capital position and consistent earnings power support a resilient valuation. The firm reported fourth-quarter 2025 earnings of $12.3 billion, a 7% increase from the prior year, driven by robust investment banking and trading revenues. The Dow Jones Industrial Average (^DJI) has underperformed recent market rallies, with GS contributing disproportionately to the index’s underperformance due to its cyclical nature. However, Cramer argues that this underperformance reflects short-term sentiment rather than fundamental weakness. He noted that GS’s historical P/E range over the past decade has been between 12 and 20, suggesting significant upside if valuation normalizes. Investor flows reflect heightened interest, with GS stock seeing a 14% increase in trading volume over the past week. The stock’s 52-week range is $372.10 to $489.90, placing current levels near the lower end of its range. Analysts have upgraded GS to 'Buy' from 'Hold' at two major institutions, citing improving credit quality and resilient client activity.