Goldman says buy these stocks that are set to benefit most from Trump tax cuts
As Wall Street gears up for President-elect Donald Trump’s return to the White House, one subset of stocks stands to potentially benefit the most from his plan to cut corporate tax rates, according to Goldman Sachs. Trump’s victory reduces the political uncertainty hanging over stocks and serves as a near-term catalyst to help drive equities broadly higher, analysts led by Goldman chief U.S. equity strategist David Kostin wrote in a research report on Wednesday. Some of that move came the day after Tuesday’s election, when the Dow Jones Industrial Average soared 3.6%, the S & P 500 surged 2.5% and the Nasdaq Composite jumped nearly 3%, all of them the largest post-Election Day moves in history. “Along with the resolution of election uncertainty, resilient recent economic growth data and continued Fed rate cuts support the healthy near-term outlook for U.S. stocks,” Kostin wrote. Overall, Kostin forecasts the S & P 500 could end the year at 6,015 if the broad market index follows the historical pattern of returning 4% between Election Day in November and year-end. The fate of the U.S. House of Representatives remains to be seen, however, and is key to whether Trump enters the White House with unified government fully in Republican hands, or faces a divided Congress. While several races for House seats remain too close to call, the chamber is leaning toward the GOP, which already wrested control of the Senate on Tuesday. A unified Republican government that swiftly passes Trump’s proposed corporate tax cuts could boost Goldman’s earnings per share growth forecast for S & P 500 companies by four percentage points, Kostin said. Trump favors slashing the corporate tax rate to 15% from 21%. Goldman forecasts earnings per share growth of 11% in 2025 and 7% in 2026. Previously enacted Trump tax cuts are set to expire at the end of 2025 unless Congress extends them or approves new legislation. To find a group of beneficiaries from lower corporate tax rates, Goldman screened for stocks that have seen the highest median corporate tax rate over the past 10 years. Companies on the list pay median corporate tax rates higher than the S & P 500 median of 21%. Here is a look at some of the stocks that turned up on Goldman’s screen. Disney made the cut. Shares of the entertainment and theme park company have advanced more than about 10% in 2024, lagging the broader market. DIS YTD mountain Disney stock. CEO Bob Iger’s media company also has one of the highest 10-year median corporate tax rates found by Goldman, at 29%. Roughly 72% of analysts polled by FactSet carry either a buy or outperform rating on Disney, and their consensus price targets imply 11% upside for the stock over the coming year. Hilton Worldwide Holdings also turned up on Goldman’s screen. Shares of the hotel and resort operator have advanced more than 35% in 2024, beating the wider market. Hilton has also paid a 10-year median corporate tax rate of 29%. HLT YTD mountain Hilton Worldwide Holdings stock. Hilton’s third-quarter earnings topped Wall Street estimates on the top and bottom lines last month, although its full-year earnings outlook fell short of forecasts from analysts polled by FactSet. Other names on the Goldman list include Delta Airlines and American Express.
