Goldman Deflates Earnings Bubble Fears with Downbeat Outlook

Goldman Sachs has weighed in on concerns that U.S. corporate profits are in an 'earnings bubble.'

According to Goldman analyst Ben Snider, while some companies are indeed 'over-earning,' the S&P 500's earnings per share growth of 51% in the second quarter and 26% over the past four quarters is above its long-term trend.

The index's forward price-to-earnings multiple of 19 is in line with its 10-year average, but Snider notes that this multiple on trend earnings has only been exceeded at the peak of the dot-com bubble.

Looking ahead, Snider forecasts S&P 500 earnings growth to decelerate, not collapse, in coming years. He predicts EPS growth of 11% in both 2027 and 2028, to $415 and $460, respectively.