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Thursday, October 05, 2006

Goldman Sachs' 2007 Forecasts

Abbey Joseph Cohen of Goldman Sachs issued some new 12-month targets and strategy calls in a note this morning to clients:

Q3-end 2007 target on the S&P 500 Index is 1460, up 8.1% from current levels of 1350. (If you wanted to use the same percentages for the DJIA, you would have an equivalent of roughly 12,800.)

She noted that the S&P profit growth would slow down, which is in-line with what the street consensus is and she gave some targets. She is looking for high single-digit S&P profit growth, down from double digit growth we have seen in the last year.

She noted that US GDP of 2.5% to 3% sustainable, down from the much higher GDP levels we saw earlier in the year. Consensus is closer to 2.5% for sustainable GDP for 2007, but these estimates are really just starting to come out.

She did note that consumer discretionary services are preferable and and she prefers large cap stocks over small cap stocks for the next 12 months.

If you think energy and commodities are dead, that may not be the case. She noted that she is looking for renewed opportunities to re-enter energy and commodities.

This is only a partial summary, and we should start getting all sorts of 2007 revisions in the coming 4 weeks from strategists at bulge bracket firms.
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