CCL, SPB, RARE, and VRSK are new additions to GS’ Long Duration Basket

Goldman Sachs analysts expect the equal-weight S&P 500 (NYSEARCA:RSP) P/E to end the year at 15x.

This forecast, according to analysts in a U.S. Macroscope report, assumes a tight labor market. It assumes inflation to continue its path towards 2%, as well as solid earnings growth, and real yields to remain close to their current levels.

On the other hand, “the aggregate S&P 500 (SP500) trades close to our estimate fair value, as the largest stocks support a substantial valuation premium,” analysts said. “We forecast the aggregate S&P 500 P/E will end the year at roughly 20x.”

When it comes to interest rates, analyst said that a positive scenario could be a meaningful shift in the Federal Reserve’s outlook, leading to lower real yields and “a catch up” in the S&P 500 (SP500).

But an increase in bond yields due to policy could lead to valuation contraction, analysts added. “With real yields settling above the levels from the past cycle, the higher cost of capital has led investors to scrutinize unprofitable or highly levered equities.”

So, GS believes investors will remain skeptical of the longest duration pockets of the equity market.

GS’ Long Duration basket returned 3% year-to-date, compared to 6% for the equal-weight S&P 500 (RSP). This is the rebalanced “long duration” basket:

• Rivian Automotive Inc. (RIVN) - Equity duration in years: 31.8
• Lucid Group Inc. (LCID) - Equity duration in years: 28.4
• Booking Holdings Inc. (BKNG) - Equity duration in years: 24.8
• Marriott International Inc. (MAR) - Equity duration in years: 24.8
• Carnival Corp. (CCL) - Equity duration in years: 24.7
• DraftKings Inc. (DKNG) - Equity duration in years: 24.5
• Clorox Co. (CLX) - Equity duration in years: 23.9
• Freshpet Inc. (FRPT) - Equity duration in years: 23.5
• Spectrum Brands Holdings Inc. (SPB) - Equity duration in years: 23.2
• Costco Wholesale Corp. (COST) - Equity duration in years: 23.1
• Texas Pacific Land Corp. (TPL) - Equity duration in years: 22.6
• TechnipFMC Plc (FTI) - Equity duration in years: 22.5
• Roivant Sciences Ltd. (ROIV) - Equity duration in years: 44.6
• Teladoc Health Inc. (TDOC) - Equity duration in years: 44.4
• Mettler-Toledo International Inc. (MTD) - Equity duration in years: 27.6
• Apellis Pharmaceuticals Inc. (APLS) - Equity duration in years: 26.8
• Sarepta Therapeutics Inc. (SRPT) - Equity duration in years: 26.3
• Ultragenyx Pharmaceuticals Inc. (RARE) - Equity duration in years: 26.2
• Natera Inc. (NTRA) - Equity duration in years: 25
• ChargePoint Holdings Inc. (CHPT) - Equity duration in years: 31.9
• Lyft Inc. (LYFT) - Equity duration in years: 28.1
• Plug Power Inc. (PLUG) - Equity duration in years: 25.8
• Verisk Analytics Inc. (VRSK) - Equity duration in years: 23.8
• Axon Enterprise Inc. (AXON) - Equity duration in years: 23.5
• Booz Allen Hamilton Holding Corp. (BAH) - Equity duration in years: 23.4
• Wolfspeed Inc. (WOLF) - Equity duration in years: 24.2
• GitLab Inc. (GTLB) - Equity duration in years: 23.8
• SentinelOne Inc. (S) - Equity duration in years: 23.8
• NCR Voyix Corp. (VYX) - Equity duration in years: 23.8
• Confluent Inc. (CFLT) - Equity duration in years: 23.7
• Cloudflare Inc. (NET) - Equity duration in years: 23.7
• Snowflake Inc. (SNOW) - Equity duration in years: 23.6
• Procore Technologies Inc. (PCOR) - Equity duration in years: 23.6
• Atlassian Corp. (TEAM) - Equity duration in years: 23.6
• MongoDB Inc. (MDB) - Equity duration in years: 23.6
• HubSpot Inc. (HUBS) - Equity duration in years: 23.6
• CrowdStrike Holdings Inc. (CRWD) - Equity duration in years: 23.6
• Zscaler Inc. (ZS) - Equity duration in years: 23.5
• Manhattan Associates Inc. (MANH) - Equity duration in years: 23.5
• AppLovin Corp. (APP) - Equity duration in years: 23.5
• Datadog Inc. (DDOG) - Equity duration in years: 23.5
• Nvidia Corp. (NVDA) - Equity duration in years: 23.4
• Scotts Miracle-Gro Co. (SMG) - Equity duration in years: 26.9
• Ginkgo Bioworks Holdings Inc. (DNA) - Equity duration in years: 25.2
• Roblox Corp. (RBLX) - Equity duration in years: 24.1
• Spotify Technology SA (SPOT) - Equity duration in years: 24.1
• Trade Desk Inc. (TTD) - Equity duration in years: 23.6
• Netflix Inc. (NFLX) - Equity duration in years: 23.2
• Meta Platforms (META) - Equity duration in years: 22.7
• AES Corp. (AES) - Equity duration in years: 24.3

Here is the link to the Short Duration List.