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Home>UPDATE: These companies are expected to increase sales the most in 2018

UPDATE: These companies are expected to increase sales the most in 2018

UPDATE: These companies are expected to increase sales the most in 2018

10/01/2017

By Philip van Doorn, MarketWatch

Analysts at Goldman Sachs expect sales growth to drive stock performance over the next few years

The bull market that has followed the S&P 500 hitting bottom in March 2009 has been driven mainly by fattening profit margins, according to analysts at Goldman Sachs. But now the path to additional long-term gains for stocks will be driven by sales growth, they say.

The S&P 500 closed at 2,496.66 on Monday, just shy of the closing milestone of 2,500.23 hit on Sept. 15. It has surged 269% since that bottom on March 9, 2009, and has returned about 343% with dividends reinvested, according to FactSet.

The Goldman Sachs team, writing in its "U.S. Weekly Kickstart" report, said they expected a weak "near-term path" that will push the S&P down to 2,400, based on an expected rise in interest rates and concurrent decline in price-to-earnings ratios. Of course, for long-term investors, a 100-point move for the S&P 500 is nothing to worry about, as it would be a decline of only 4%.

Longer term, the Goldman Sachs researchers see rising labor costs (along with the higher interest rates) to be "headwinds" to further expansion of profit margins. So with lackluster prospects for profit-margin improvement or increased price-to-earnings ratios, the analysts are hanging their hats on top-line growth for long-term growth through 2019.

So here's a simple list of the 20 S&P 500 companies expected to increase their total revenue the most in 2018, according to consensus estimates among analysts polled by FactSet:

 Company Ticker Industry Revenue - 2016 ($mil) Estimated revenue - 2017 ($mil) Estimated revenue - 2018 ($mil) Expected revenue increase - 2017 Expected revenue increase - 2018 EQT Corp. US:EQT Oil and Gas Production $1,802 $3,057 $5,323 70% 74% FMC Corp. US:FMC Chemicals $3,282 $2,694 $4,395 -18% 63% Coach Inc. US:COH Apparel/ Footwear Retail $4,492 $4,488 $5,864 0% 31% Facebook Inc. Class A US:FB Internet Software/ Services $27,638 $39,088 $50,702 41% 30% Rockwell Collins Inc. US:COL Aerospace and Defense $5,259 $6,856 $8,749 30% 28% Autodesk Inc. US:ADSK Softwae $2,031 $2,048 $2,553 1% 25% Amazon.com Inc. US:AMZN Internet Retail $135,987 $168,829 $207,554 24% 23% Concho Resources Inc. US:CXO Oil and Gas Production $1,635 $2,501 $3,068 53% 23% Netflix Inc. US:NFLX Entertainment/ Movies $8.831 $11,494 $14,075 30% 22% Lam Research Corp. US:LRCX Electronic Production Equipment $5,888 $8,014 $9,778 36% 22% Vertex Pharmaceuticals Inc. US:VRTX Biotechnology $1,702 $2,222 $2,703 31% 22% Align Technology Inc. US:ALGN Medical Specialties $1,080 $1,398 $1,695 29% 21% Salesforce.com Inc. US:CRM Software $8,392 $10,392 $12,454 24% 20% Adobe Systems Inc. US:ADBE Software $5,836 $7,247 $8,682 24% 20% Newfield Exploration Co. US:NFX Oil and Gas Production $1,472 $1,710 $2,040 16% 19% Cabot Oil & Gas Corp. US:COG Oil and Gas Production $1,195 $1,871 $2,231 57% 19% Range Resources Corp. US:RRC Oil and Gas Production $1,361 $2,210 $2,625 62% 19% Coty Inc. Class A US:COTY Household/ Personal Care $4,344 $7,650 $9,037 76% 18% PayPal Holdings Inc. US:PYPL Payment Processing Services $10,723 $12,849 $15,177 20% 18% Baker Hughes, A GE Co. Class A US:BHGE Oilfield Services/ Equipment $9,841 $20,524 $24,192 109% 18% Source: FactSet 

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