Continue reading this on our app for a better experience

Open in App
Floating Button
Home News US Economy

Goldman Sachs strategists say US sales forecasts for 2025 are too high

Bloomberg
Bloomberg • 2 min read
Goldman Sachs strategists say US sales forecasts for 2025 are too high
Goldman Sachs expects S&P 500 sales to rise by 4% in 2025 compared with 6% this year.
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Corporate America’s expectations for sales next year are too high given the outlook for a moderating economy and weaker dollar, according to Goldman Sachs strategists.

The team led by David Kostin said it expects S&P 500 sales to rise by 4% in 2025 compared with 6% this year, as the median stock outside the energy sector is more sensitive to the economy and less international-facing.

By contrast, analysts expect a 5.8% increase in 2025 revenue, according to data compiled by Bloomberg Intelligence.

The median analyst forecast “for a sharp acceleration in sales growth appears slightly too optimistic”, Kostin wrote in a note dated Aug 16.

S&P 500 companies are on track to post the sharpest increase in quarterly earnings since 2021, data compiled by Bloomberg Intelligence show. At the same time, the share of firms beating sales estimates in the second quarter is the smallest since 2019, raising concerns about the resilience of profit margins.

See also: BlackRock’s Larry Fink says market is wrong on Fed rate cut bets

Kostin still sees margins expanding next year, as a slowdown in price increases has been countered by easing cost pressures, including wages. Still, the strategist said margins are unlikely to expand as much as analysts expect.

Morgan Stanley strategist Michael Wilson, meanwhile, has warned about a shorter-term weakening in the earnings outlook, in line with the seasonal trend.

Chart: Bloomberg

×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.