This market rally is on solid ground, according to Goldman Sachs.
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US stocks are clicking on all cylinders, which led Goldman Sachs to lift its S&P 500 target again.
The top investment bank now expects the index to reach the 6,000 mark by year end.
Here are 25 companies set for outstanding earnings growth in 2025.
A leading Wall Street firm by any measure can't seem to keep up with the S&P 500's surges.
Goldman Sachs just raised its target for the index for the fourth time in less than 12 months. The financial titan originally set its 2024 S&P 500 target at 4,700, then lifted it a month later to 5,100. By February, the firm had revised it higher to 5,200, before boosting it to 5,600 over the summer.
But the S&P 500 has kept hurdling over milestones, so Goldman Sachs is once again raising the bar. The firm now expects it to reach 6,000 by year-end and 6,300 in the next 12 months. Those targets represent 4.6% upside through year-end and nearly 10% in the coming year.
Goldman Sachs
Stellar earnings growth inspired the change. David Kostin, Goldman's chief US equity strategist, wrote in his weekly note that he and his colleagues are calling for 8% profit growth this year. That would translate to $241 worth of S&P 500 earnings, before an 11% jump in 2025 to $268 and an additional 7% leap in 2026 to $288. The index's earnings multiple should stay near 22x.
Impressive performances from usual suspects also underpinned the S&P 500's move higher. Kostin noted in a separate early-October note that mega-cap growth stocks like Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia accounted for 44% of the market's gain through the third quarter, where it was up 20.8% and 22%, including dividends.
All 11 S&P 500 sectors are in positive territory this year, though some have fared much better than others. Communication services and information technology were the best year-to-date performers through the first week of October, though utilities weren't far behind since they also have exposure to artificial intelligence. However, this trade may be losing some steam.
"Performance of the AI infrastructure trade slowed in 3Q, with a basket of AI infrastructure stocks only rising by 4% vs. 15% during 1H," Kostin wrote in early October.
Below are the 28 stocks among the 100 biggest names in the S&P 500 that analysts think will have higher profit growth than the index's 15% rate next year, along with their ticker, market capitalization, and expected earnings growth in 2024 and 2025. "NM" means "not meaningful."
