Goldman Sachs says the S&P 500 is not in an earnings bubble, even as corporate profits keep growing faster than the broader economy. The bank points to signs of over-earning and forecasts earnings-per-share growth will slow next year rather than collapse.
Goldman Sachs forecasts S&P 500 earnings per share growth of 11% year-on-year in 2027 and 2028, a slower pace than the gains companies have posted this year.
The New York-headquartered investment bank holds that the S&P 500 is not in an earnings bubble, but it has pointed to signs of over-earning after a year of outsized profit growth in the S&P 500. Corporate earnings can keep expanding even if not at this year's rapid pace, the Wall Street firm says.
Goldman's view is that EPS growth will slow but not collapse. The bank's stance separates the current run of corporate profits, which have grown much faster than the wider economy, from the kind of unsustainable surge that would signal a bubble.
Source: MarketWatch.com (snippet-based)
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