Goldman Sachs sees S&P 500 rising to 8,700 next year despite slower earnings growth
SPY•Goldman Sachs expects the S&P 500 to reach 8,700 over the next 12 months, more than 14% above its last close, despite slower earnings growth. It expects U.S. earnings growth to fall to 11% in 2027 from 36%.
1. Index outlook
Goldman Sachs expects the S&P 500 to climb to 8,700 points over the next 12 months, more than 14% above its last close of 7,592.40. The brokerage said attractive valuations after a recent selloff should support positive equity returns despite slower earnings growth.
2. Earnings and valuations
Goldman expects global earnings growth rates to at least halve in 2027, with U.S. growth likely to slow to 11% from 36%, possibly as hyperscaler capital spending growth eases. The S&P 500 was trading at about 18.5 times 12-month forward earnings, down from recent highs of more than 23 times.
3. Regional ratings
Goldman maintained an overweight rating on the U.S. and Japan, neutral ratings on Asia and emerging markets, and an underweight rating on Europe. It said equities could generate positive returns with higher volatility than in recent years.
