High sales growth is among the investment themes for 2020 being recommended by the portfolio investment strategy team at Goldman Sachs, led by David Kostin, that firm's chief U.S. equity strategist. Using data from FactSet Research Systems, the Goldman team identified the 100 stocks in the S&P 500 Index that are projected to have the biggest year-over-year percentage revenue increases in 2020, based on consensus analyst estimates.
In their analysis, Goldman excluded stocks in the financial, utility, and real estate sectors of the S&P 500. The top 10 in terms of projected 2020 sales growth rates are: Bristol-Myers Squibb Co. (BMY), 74%, Global Payments Inc. (GPN), 63%, Boeing Co. (BA), 44%, Fidelity National Information Services (FIS), 31%, Vertex Pharmaceuticals Inc. (VRTX), 28%, ServiceNow Inc. (NOW), 28%, salesforce.com Inc. (CRM), 23%, Netflix Inc. (NFLX), 22%, Facebook Inc. (FB), 22%, and Adobe Inc. (ADBE), 19%.
- Goldman Sachs recommends high sales growth as a theme for 2020.
- They identified S&P 500 stocks with the highest projected sales growth.
- The top 10 in this regard are in a variety of industries.
Significance for Investors
The projected 2020 average sales growth rate of 6% for the entire S&P 500 is equal to the actual growth rate for 2019, based on current estimates. Looking at sectors, communication services, at 11%, and information technology, at 9%, are the only two in the analysis (which excludes financials, utilities, and real estate) expected to deliver higher sales growth than the index as a whole.
In 2019, Goldman notes that information technology and communication services both beat the S&P 500. Additionally, out of 27 sectors, styles, and strategies tracked by Goldman, these two sectors plus financials were among the six that outperformed the S&P 500.
The 10 stocks listed above, meanwhile, come from a variety of industries. Bristol-Myers Squibb and Vertex are drug makers. Global Payments and Fidelity National are financial services technology companies, including the field of payments processing. Boeing is a leading aircraft manufacturer. ServiceNow and Salesforce.com offer cloud computing solutions and applications. Abobe is a software provider. Facebook is a leading social media company, whose properties also include Instagram, Messenger, and WhatsApp, as well Oculus 3D glasses used by video game players. Netflix offers video streaming.
Macro factors such as the economic growth rates in the U.S. and globally will be key factors determining whether these projected revenue growth rates are realized. The paths of consumer confidence and business confidence in 2020 also will be critical determinants.