Goldman Sachs says the world is aging and demographic changes present “significant” investment opportunities. Fertility rates are declining and people are living longer, resulting in the elderly making up an ever-increasing share of the total population. By 2050, the global population is expected to be will grow by approximately 20%. But at the same time, the number of people over 65 is expected to double from 800 million to 1.6 billion, according to the United Nations. “In developed markets, spending habits change as individuals age and differ between generations, which has implications for growth and investment opportunities,” Talenda wrote in a note last Wednesday. “In the United States and Europe, older adults spend a higher share of total spending on health care and housing, and less on transportation and insurance/pensions,” he added. Goldman Sachs sees strength in three areas: health care, senior living and care, and entertainment and experiences. Healthcare As people age, healthcare spending increases as they deal with more medical problems, such as heart disease, hearing loss, diabetes and depression. In 2021, people over 65 accounted for 36% of U.S. health care spending despite making up 18% of the population, according to an analysis by KFF, a health spending panel survey conducted by the nonprofit KFF in partnership with Peterson. Healthcare Center. A separate Goldman Sachs analysis of data from the Institute for Health Metrics and Evaluation found that per capita personal health care spending among U.S. seniors over age 60 increased by about 2,400% for cardiovascular disease and 970% for neurological conditions. In terms of treatment, diabetes prevalence increased by 550% compared with those under 45 years of age. Here are some health care stocks that Goldman Sachs believes could benefit from this trend. They are both rated Buy by investment banks. Senior Living and Care As people age, they look for ways to stay in their homes for as long as possible or move into senior housing. This means increased demand for home care and rehabilitation services, as well as assisted living, nursing facilities and long-term care facilities. Goldman Sachs has a buy rating on one U.S. company that will benefit from this trend: BrightSpring Health Services. Louisville-based BrightSpring, which went public a year ago in an initial public offering led by Goldman Sachs, provides community and home health services as well as infusion services, specialty pharmacies and rehabilitative care. BTSG 1Y Mount Brightspring Health Services over the past year. There are also REITs that offer senior living, such as Welltower and Ventas, but Goldman Sachs does not cover these trusts. Analysts have an average rating of “overweight” on Welltower, according to FactSet, and Wall Street sees the company rising 14% over the next 12 months, based on consensus analyst price targets. Ventas also has an average rating of “overweight,” and its average price target has room for about 21% upside, according to FactSet. Entertainment and experiences Finally, older generations like to spend their money and time in different ways than younger generations, Tellenda said. His research found that leisure activities, such as using recreational vehicles, cruising and riding motorcycles, were more common among people closer to retirement age or older. They also have high rates of pet ownership in the early years and allocate more spending to animals, he said. Goldman Sachs has buy ratings on Norwegian Cruise Line, Carnival Cruise Line and Royal Caribbean Cruises. It also has a buy rating on pet e-commerce company Chewy. Cruises, which are typically cheaper than land-based accommodation on a nightly basis, have been experiencing a surge in demand since closures during the coronavirus pandemic.
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