The CEO of Goldman Sachs was considered a dead man. One year later, the “David Solomon” era is being celebrated as a success

Goldman Sachs shares have risen about 21 percent since the beginning of the year and have gained nearly 53 percent since the end of October, according to a July 7 study by Devin Ryan, managing director and senior research analyst at Citizens JMP. That puts the company ahead of the S&P 500, which has gained about 17 percent since the beginning of the year and 33 percent since October.

Goldman’s Global Banking & Markets (GBM) unit has gained more market share than any other major bank, while the bank has significantly expanded its sustainable revenue streams. The stock has gained 106 percent since Solomon’s first day as CEO on Oct. 1, 2018, Ryan said in the note.

Goldman increased its market share in global banking and markets by around 350 basis points, which Ryan said was the largest increase in its peer group. Ryan said the “David Solomon era” at Goldman was a great success and raised his price target from $460 to $525, the statement said. On Tuesday, Goldman shares closed up almost 2 percent at $473.49, while the market capitalization was around $153 billion.

Goldman has suffered some very public setbacks. The investment bank reorganized in 2022 and retreated from its push into retail banking. That led to the sale of specialty lender Greensky to Sixth Street and the departure of Stephanie Cohen, a key Solomon deputy and once one of the most powerful women at Goldman. (The move into retail banking was costly. Goldman disclosed in January 2023 that it had lost about $3 billion in connection with the deal, according to the New York Times.)

Goldman also laid off thousands of employees last year as the investment bank, a well-known M&A advisor, struggled with a sustained decline in deals. Then there was the negative press, which quoted Goldman’s normally tight-lipped partners complaining about Solomon’s erratic character and his side job as a DJ.

“To be clear, not every move was perfect (e.g., exiting the consumer business), but when you look at the overall execution, the last few years have been a great success by our standards,” Ryan said in an email to Fortune.

Many people have overlooked the underlying momentum of Goldman’s core businesses, Ryan said. These included leading market share gains in global banking and finance, rapid fundraising and broader growth within the asset management unit that was much stronger than the results reflected given the unusually difficult business environment in 2022 and 2023, Ryan said.

Alternatives as main drivers for Goldman

“As the operating environment recovers, the market is waking up to the company’s potential today (as reflected in the current record share price) and we see even more room to run from here as we expect GBM to continue to gain market share and the AWM segment to see a strong acceleration in earnings as market conditions improve and recently raised alternative assets increasingly generate high margin management and incentive fees,” noted Ryan.

Ryan expects the investment bank’s asset and wealth management business to contribute more to Goldman’s top and bottom line, the note said. Goldman’s alternative platform, which includes private equity and private credit, is also expected to be a key driver, he said. Goldman has raised $265 billion in alts AUM since 2019, bringing firmwide alts AUM to about $500 million, Ryan said. (Goldman alts AUM was $456 billion as of Sept. 30, 2023, according to the firm’s website.) “Goldman Sachs has been a great story over the past few years, and we still see a lot of upside as capital markets ‘normalize’ and the value of its asset and wealth management business becomes more apparent to the market as earnings power increases significantly,” Ryan said in the note.

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