Instead of emphasizing change, David Solomon is now touting consistency. The Goldman Sachs (GS) chief executive laid out a new way of thinking about revenue on Tuesday, alongside the Wall Street investment bank’s $1.9 billion in earnings for the fourth quarter. It’s a reasonable approach, but one where arch-rival Morgan Stanley is doing even better.

When Solomon moved into the corner office five years ago, he set out to make Goldman’s earnings more predictable. Banking everyday customers, and not just the rich, was a big part of the strategy. It flopped, and the aftereffects are reflected in the $1.7 billion loss recorded in 2023 by the unit that houses the consumer bank. As an antidote, Goldman argues that much of its top line, or 43% of $46 billion, is already fairly predictable.

Goldman’s definition of “more durable,” as it describes such revenue, is somewhat generous. It covers fees and private banking, but also “financing” that counts lending money to flighty hedge funds. Even so, Solomon’s new focus persuasively notes that Goldman may be less volatile than investors give it credit for. Even at their 10-year worst, the more cyclical parts of revenue amounted to $14.1 billion.

Durability cuts both ways, however. The measure puts Morgan Stanley in a brighter light. It simultaneously reported fourth-quarter earnings, the last for Chief Executive James Gorman before Ted Pick took over for him on Jan. 1. The bank discloses things differently than its historically biggest competitor, but add together wealth and investment fees, interest income and an estimate of its equities financing revenue based on the first nine months of the year and roughly 60% of revenue qualifies as durable. It’s one reason why Morgan Stanley trades at 14 times forward earnings, according to LSEG data, compared to Goldman’s 11 times; the gap is twice as large as it was at the end of 2018.

At least Goldman is catching up. Its more durable bits grew by about 8% last year from 2022. And besides, durability isn’t everything. When animal spirits are high, Goldman generally flourishes. Noting that when market conditions are good, it will outgun peers and when they’re bad it may do worse isn’t a message that all shareholders would embrace. As the ill-fated retail banking initiative made clear, however, catering to everyone isn’t Goldman’s strong suit.

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Goldman Sachs on Jan. 16 reported $1.9 billion of earnings for the fourth quarter of 2023, a 58% increase from a year earlier. Its revenue expanded by 7%, driven by a nearly one-quarter increase from its asset and wealth management division, offset by a decline in fixed-income trading and dealmaking. The Wall Street bank generated a 7.6% return on equity, which would have been 8.6% absent one-off charges, including a regulatory levy to shore up the U.S. failed-bank rescue fund. Also on Jan. 16, Morgan Stanley reported earnings of $1.4 billion over the same three-month period, a 35% year-on-year decline. Revenue in the firm’s wealth and investment management businesses, which make up around two-thirds of the total, was roughly unchanged from a year earlier, while revenue from trading and investment banking rose by 3%. Ted Pick, former head of the trading and dealmaking division, took over as Morgan Stanley’s new chief executive on Jan. 1, replacing James Gorman.

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