Goldman Sachs: S&P 2027 EPS Growth Rate Falls to 11%, Defensive Quality Stocks Outperform

According to Chaoxiang Research, Goldman Sachs' October 16, 2026 research note states S&P 500 earnings per share (EPS) are projected to grow 36% in 2026, slow to 11% in 2027, and hold steady at 11% in 2028; the 2027 EPS is estimated at $415, falling 16% short of buy-side consensus estimates and 15% below sell-side strategists' forecasts; Goldman Sachs has screened 23 healthcare and consumer staples stocks characterized by low volatility and high free cash flow yields.

Goldman Sachs assesses that although growth is decelerating, it remains positive, market returns are subdued, momentum factor risk rises amid narrow market breadth, and defensive quality stocks along with the low-volatility factor take the lead. Real income growth for the lower-end consumer segment is projected to increase 1.8% in 2027, up from 0.4% in 2026; the lower-end consumer discretionary stock basket has gained 7% since October, forming another allocation theme.