Goldman Sachs Sees S&P 500 Rising to 8,700 Next Year Despite Slower Earnings Growth
The brokerage said lower valuations and softer inflation should support positive returns even as earnings growth slows.
- Goldman Sachs expects the benchmark index to climb to 8,700 points over the next 12 months, as more attractive valuations following a recent sharp selloff should help equities deliver positive returns despite slower earnings growth.
- The brokerage's call follows a massive selloff in major technology companies after the Democratic win in midterm elections last week spurred concerns of a slowdown in data center buildout.
- Valuations remain attractive, with the index trading at around 18.5 times its 12-month forward earnings, well off recent highs of over 23. Earnings growth rates are likely to drop to 11% from 36% in 2027.
- Within equities, Goldman maintained an "overweight" rating for Japan, "neutral" for Asia, and "underweight" for Europe. Troubles at chip giant Nvidia after CEO Jensen Huang quit have added to worries about the AI trade.
- "From here, we expect equities to generate positive returns, albeit with higher volatility than in recent years," Goldman Sachs said. This outlook assumes positive but slower economic and earnings growth, alongside lower bond yields and inflation.
19 Articles
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Goldman Sachs analysts are projecting an increase in the S&P 500 stock index to 8,700 points in the next 12 months.
The S&P 500 index could rise to 8,700 points in the next year, according to a new forecast from Goldman Sachs, which would mean a return of more than 14 percent for investors. According to the American bank, the technology sell-off that unfolded after the Democratic victory in last week's midterm elections has made stock prices much more attractive. Analysts expect US corporate profit growth to slow from 36 percent to 11 percent in 2027, mainly …
Goldman Sees S&P 500 Rising 14% on Cheap Hyperscaler Valuations
Goldman Sachs Group Inc. strategists are bullish on US stocks for 2027, predicting the S&P 500 will advance 14% over the coming year after a selloff in the biggest technology companies left their valuations historically cheap.
Goldman Sachs projects the S&P 500 to advance 14% to 8,700 points in 2027, although it anticipates a slowdown in profits and less impulse of investment in artificial intelligence.
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