Deep Dive: 20 stocks expected by Goldman Sachs to gain the most from Washington’s clean-energy spending

by | Jan 3, 2023 | Stock Market

President Joe Biden signed the Inflation Reduction Act (IRA) into law in August. Then he followed up with the fiscal 2023 omnibus appropriations bill on Dec. 23. Now that we are all done celebrating the new year, Goldman Sachs has listed 20 companies that its analysts expect to see the greatest benefits to earnings or share prices from the IRA’s authorized $391 billion in spending on clean-energy and climate-change initiatives over a 10-year period, according to this IRA summary by the Committee for a Responsible Federal Budget.

When the IRA was passed, some investors were worried that they pay a price for some of its provisions, such as a 1% tax on corporate-share buybacks or a 15% minimum federal income tax for companies. But Goldman is taking a different view with its list of companies poised to grow rapidly, in part as a result of new government spending. This is obviously a long-term investment story. That means investors looking to ride the tailwinds of this spending need to commit for many years. On Jan. 2, Goldman Sachs chief risk officer Brian Lee listed the investment bank’s “top 20 buy-rated stock ideas,” based on “quantifiable” benefits from IRA spending. Lee placed the companies into groups based on Goldman’s estimates of percentage “IRA impact” to the companies earnings per share or to their stock prices. You might reasonably expect companies tied to solar energy and electric vehicles to dominate …

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