STOCKS | Goldman Sachs Sees S&P 500 at 8,700 by End-2027, Favors U.S. and Japanese Stocks

Goldman Sachs strategists see the U.S. bull market extending through 2027 despite slower earnings growth, as valuations, bond yields, oil prices, and inflation ease. According to Sina Finance, a team led by Peter Oppenheimer forecasts the S&P 500 at 8,700 over the next 12 months, implying a 14% price return and a 16% total return; it expects earnings growth to slow from 36% in 2026 to 11% in 2027. The team favors growth stocks, selected defensive sectors, and stocks that could benefit from lower oil prices and bond yields. After a sharp pullback in technology valuations, it favors large U.S. cloud providers, while noting that slower AI capital-spending growth, volatility in bond and oil markets, and market concentration could increase volatility. The team rates Japanese stocks overweight, with a 4,500 target for the TOPIX, implying a 15% price return and a 17% total return. It expects Japanese earnings per share to grow 9% in 2027. In a separate European outlook, Goldman Sachs set a 12-month target of 700 for the STOXX 600, implying about a 6% price return and a 9% total return, with earnings growth slowing from 18% to 7%. Its 12-month targets for the EURO STOXX 50 and FTSE 100 are 6,700 and 11,400, respectively. The team favors European technology, retail, telecommunications, utilities, defense, and renewable energy; it remains underweight autos and chemicals, downgraded banks to neutral, and cut insurance and energy to underweight.