With earnings expected to slow, Goldman strategists eye value in growth
SPY•Goldman Sachs strategists expect S&P 500 earnings growth to slow to 11% in 2027 from an estimated 36% in 2026, but expect equities to keep rising with high volatility. They favor the US and Japan and see opportunities in long-duration growth companies and selective defensives.
1. Earnings growth outlook
Goldman Sachs strategists expect earnings growth for S&P 500 companies to fall to 11% in 2027 from an estimated 36% in 2026. They also expect growth to slow in Europe, to 7% from 18%, and in emerging markets, to 26% from 66%.
2. Strategy and market risks
The strategists expect equities to continue rising, but with high volatility, citing more attractive valuations and the prospect of slower nominal economic and earnings growth, lower bond yields, inflation and oil prices. They favor the US and Japan, are neutral on Asia and emerging markets, and are underweight Europe; they also point to long-duration growth companies, including US hyperscalers, and selective defensives. They cautioned that bonds, oil prices and shifts in AI capital spending could increase volatility.
