2022 Sector Outlook - Health CareBe like Wayne Gretzky, speedy99, and don't look at where the puck is, but look at where it's going.
It’s “Outlook 2022″ season on Wall Street and Goldman Sachs’ chief U.S. equity strategist David Kostin is the latest to contribute,
“We forecast the S&P 500 index will climb by 9% to 5100 at year-end 2022, reflecting a prospective total return of 10% including dividends. Profit growth has accounted for the entire S&P 500 return in 2021 and will continue to drive gains in 2022. S&P 500 EPS will grow by 8% to $226 in 2022 and by 4% to $236 in 2023. Our EPS estimate is 2% above 2022 bottom-up consensus. Companies have consistently expanded profit margins despite input cost pressures and supply chain challenges … The S&P 500 P/E multiple will remain roughly flat, ending 2022 at 21.6x. After two years of near-zero interest rates, the Fed will likely begin hiking in July … SECTOR RECOMMENDATIONS: Our earnings forecasts coupled with our macro model indicate investors should overweight the Info Tech, Financials, and Health Care sectors. Raise Financials to overweight on expectations of rising interest rates and strong economic growth in the first half of the year. Raise Health Care to overweight as declining policy uncertainty should help close the sector’s record valuation discount. Maintain long-term overweight in Information Technology on strong secular growth, high margins, and valuations in line with historical averages. Underweight ‘bond proxy’ Consumer Staples, Utilities, and Telecom Services as well as the expensive Autos industry group.”