Goldman Sachs chief U.S. equity strategist David Kostin says investors should brace themselves for difficult times ahead. Stocks have been on a tear recently, with the S & P 500 up about 13% from a low reached in mid-June. However, macro outlook has deteriorated in recent months, he said.

"Economic growth is the primary driver of EPS growth," Kostin wrote. He's also forecasting net profit margins will expand 9 basis points in 2022. "We forecast 2023 margin contraction in every sector, led by Materials, Energy, and Health Care," he said.

Match Group and Whirlpool are two of the companies that made the list. Match Group's stock has been pummeled this year, down 46%. The dating app operator reported revenue for the second quarter that missed estimates along with weaker-than-expected guidance. The company's margins fell 565 basis points from the first to the secondquarter.

Whirlpool announced it would acquire Emerson's food waste disposer business InSinkErator for $3 billion. Yum Brands saw strong sales growth with Taco Bell, but lockdowns in China weighed on Pizza Hut's and KFC's sales. Whirlpool's margins fell 438 basis points between the first and second quarter.

Analysts see margins growing by 118 basis points from second quarter 2022 to second quarter 2023. However, analysts see margins grow by 118% in the second quarter of 2023, up from the first quarter of 2022. Analysts expect margins to grow by more than 100% in each of the next two years.
Posted by AL alphaman
Tap to Copy the Short Url to This Post: 
One-Stop Business News backed by Mark Cuban. Free to Use →