Goldman Sachs Bullish on S&P 500, Flags 3 Stocks to Watch

Goldman Sachs raised its S&P 500 year-end forecast to 6,900, up from 6,500, and flagged three stocks to watch: Kohl's, Intellia Therapeutics, and Gogo Inc. The firm expects S&P 500 earnings to grow 7% this year and next, fueled by solid consumer demand and robust performance from top-tier index constituents. Goldman highlighted Kohl's as a deep value play with a turnaround catalyst, while Intellia Therapeutics and Gogo Inc. are tied to structural trends driving outperformance.

Goldman Sachs has raised its year-end forecast for the S&P 500, projecting the index to reach 6,900 by the end of the year, up from a previous estimate of 6,500. The investment bank attributes this upward revision to the Federal Reserve's expected earlier and deeper rate cuts, lower bond yields, and robust earnings growth from top-tier index constituents [1].

The S&P 500 is forecast to rise 6% to 6,600 in the next six months and 11% to 6,900 in the next 12 months, according to David Kostin, chief US equity strategist at Goldman Sachs Research. Kostin's team expects lower 10-year Treasury yields to boost the stock market, with every 50 basis-point decline in real bond yields associated with a roughly 3% increase in S&P 500 forward P/E [1].

Goldman Sachs has also flagged three stocks to watch: Kohl's, Intellia Therapeutics, and Gogo Inc. The firm expects Kohl's to benefit from a turnaround catalyst, while Intellia Therapeutics and Gogo Inc. are tied to structural trends driving outperformance. Kohl's is highlighted as a deep value play, with the potential for a turnaround in consumer demand. Intellia Therapeutics is positioned to benefit from advancements in gene-editing technologies, while Gogo Inc. is expected to gain from the growing demand for in-flight connectivity services [1].

The investment bank's positive outlook for the S&P 500 is supported by solid consumer demand and the resilience of earnings growth, with projections for 7% growth in 2025 and 2026. However, Goldman Sachs also notes that shifting trade policy creates significant uncertainty around company earnings forecasts. The firm expects the market rally to broaden during the next few months, with limited scope for small-caps and other lower-quality stocks to consistently outperform [1].

References:
[1] https://www.goldmansachs.com/insights/articles/s-and-p-500-projected-to-rally-more-than-expected