As Wall Street prepares for President-elect Donald Trump to return to the White House, a subset of stocks could benefit most from his plans to cut the corporate tax rate, Goldman Sachs said. Analysts led by David Costin, chief U.S. equity strategist at Goldman Sachs, wrote in a research note on Wednesday that Trump’s victory reduced the political uncertainty hanging over the stock market and became a factor that helped drive the broader stock market. Near-term catalysts higher. Some of those moves occurred the day after Tuesday’s election, when the Dow Jones Industrial Average surged 3.6%, the S&P 500 surged 2.5% and the Nasdaq Composite climbed nearly 3%, all of which were the largest post-Election Day gains in history. trend. “Recent strong economic growth data and continued Fed rate cuts support a healthy near-term outlook for U.S. stocks as election uncertainty resolves,” Kostin wrote. Overall, Kostin predicts that if the broad market index follows the lead on Election Day in November With a historical pattern of 4% returns through the end of the year, the S&P 500 could end the year at 6,015 points. However, the fate of the U.S. House of Representatives remains to be seen, which will be crucial to whether Trump wins the White House with a unified government entirely in Republican hands, or faces a divided Congress. While several races for House seats remain close, the chamber tilts toward Republicans, who seized control of the Senate on Tuesday. Costin said that if the Republican administration can quickly pass Trump’s corporate tax cut proposal, Goldman Sachs’s earnings per share growth forecast for S&P 500 companies will increase by four percentage points. Trump favors cutting the corporate tax rate from 21% to 15%. Goldman Sachs expects earnings per share to grow 11% in 2025 and 7% in 2026. Previous tax cuts enacted by Trump are set to expire at the end of 2025 unless Congress extends them or approves new legislation. To find beneficiaries of lower corporate tax rates, Goldman Sachs screened stocks with the highest median corporate tax rates over the past decade. Companies on the list pay a median corporate tax rate higher than the S&P 500’s median of 21%. Here are some of the stocks showing up on Goldman Sachs’ screens. Disney made the cut. Shares of the entertainment and theme park company have risen about 10% through 2024, lagging the broader market. DIS Mountain Disney Stock Year-To-Date. Chief Executive Bob Iger’s media company also has one of the highest corporate tax rates of the decade found by Goldman Sachs, at 29%. About 72% of analysts surveyed by FactSet have a buy or outperform rating on Disney, and their consensus price targets imply room for an 11% upside for the stock in the year ahead. Hilton Worldwide Holdings Inc. also appears on Goldman Sachs’ screens. Shares of the hotel and resort operator are up more than 35% through 2024, outperforming the broader market. Hilton also pays a ten-year median corporate income tax of 29%. HLT YTD Hilton Worldwide Holdings Inc. stock. Hilton’s third-quarter profit last month beat Wall Street expectations for both the top and bottom lines, although its full-year profit outlook fell short of forecasts by analysts polled by FactSet. Other names on Goldman’s list include Delta Air Lines and American Express.
Goldman says buy these stocks set to benefit most from Trump tax cuts | Global News Avenue
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