Goldman Sachs cautiously optimistic about the U.S. consumption outlook recommends buying these U.S. stocks

According to the Zhitong Finance APP, Goldman Sachs has released a research report forecasting U.S. consumer spending in 2026. Despite ongoing concerns about consumer behavior, Goldman Sachs remains cautiously optimistic about 2026. The firm advises investors to seize growth opportunities amid changing consumer dynamics, recommending "buy" ratings for U.S. stocks such as McDonald's (MCD.US), PepsiCo (PEP.US), Home Depot (HD.US), and Ulta Beauty (ULTA.US), which are more affected by discretionary spending. Conversely, the firm has given "sell" ratings to Crocs (CROX.US), Clorox (CLX.US), and Conagra (CAG.US), as these companies may face revenue growth pressures.

On September 3-4 local time, Goldman Sachs will invite approximately 85 consumer companies to its 32nd Annual Global Retail Conference. At this conference, Goldman Sachs hopes to gain insights into the latest shopping behaviors of American consumers during the back-to-school season and the period around holidays, as well as their views on tariffs and prices. Goldman Sachs expects that the communication regarding consumer conditions and macroeconomic uncertainties in the second half of 2025 will be relatively cautious. However, despite concerns about consumer behavior, Goldman Sachs remains cautiously optimistic about 2026. The firm anticipates an improvement in the growth of disposable personal income, along with potential benefits from interest rate cuts and a slowdown in basic consumer spending, which should lead to more discretionary cash flow for consumers next year.

Through this report, we have adjusted our forecasts for 2025 and developed Goldman Sachs' 2026 U.S. consumer discretionary cash flow (DCF) model based on economists' predictions for disposable personal income in 2026. Goldman Sachs economists expect that the real growth of disposable personal income in 2026 will exceed that of 2025, driven by a rebound in job growth, the easing of inflation due to tariffs, and moderate fiscal stimulus early next year. Additionally, after incorporating this factor into its DCF model, Goldman Sachs expects total household cash flow growth in 2026 to improve to +4.2%, up from +3.8% in 2025, benefiting from increased mortgage equity extraction and borrowing due to a more relaxed interest rate environment, as well as moderate debt relief and more reasonable necessary spending.

Furthermore, this should help the pre-DCF growth rate for savings in 2026 reach +4.6%, higher than +3.8% in 2025. However, Goldman Sachs notes that this is still below the pre-COVID average growth level of +5.4% from 2009 to 2019. Additionally, Goldman Sachs economists expect the savings rate to be around 4.9% (as a percentage of income), which also supports the potential acceleration of spending growth in 2026, as shown in Goldman Sachs' DCF forecast adjusted for savings, which is +4.1%, higher than +3.8% in 2025.

Overall, Goldman Sachs points out that concerns about the health of American consumers are increasing, along with a growing trend of value-seeking consumer behavior, especially among the lowest income groups This is reflected in the management's statements and the strengthening of promotional activities by fast-moving consumer goods manufacturers. However, Goldman Sachs expects that the combined effects of job growth, interest rate cuts, and more reasonable basic spending will keep the consumption capacity of different income levels stable, with the DCF growth rate for all income levels expected to remain in the low to mid-single-digit percentage range over the next year. Additionally, Goldman Sachs anticipates that growth will be more concentrated among the middle-income group, as they benefit from policies such as no additional taxes on tips or overtime pay and the deductibility of interest on automatic loans, while low-income groups will face adverse effects due to cuts in Medicaid and food stamp benefits.

HundredX data shows that net purchase intentions are accelerating: Goldman Sachs' analysis indicates that in August, overall net purchase intentions significantly accelerated after a weak trend at the end of June and early July. During this period, purchase intentions in each consumer sector contributed to this improvement, but Goldman Sachs observed a shift in trends among income demographics, with low-income consumers' purchase intentions outperforming all other income groups in June, significantly deteriorating in July, and showing a declining trend in August compared to all other income groups. In contrast, the trend of purchase intentions among high-income consumers showed the most significant growth in July/August.

Looking ahead to 2026, this will prompt Goldman Sachs to continue favoring more discretionary-driven categories in the sectors covered, while also maintaining an optimistic outlook on certain consumer staples stocks. Based on this, Goldman Sachs has given "buy" ratings to U.S. stocks including Ulta Beauty (ULTA.US), Ollie's Bargain Outlet (OLLI.US), Home Depot (HD.US), Kontoor Brands (KTB.US), Amer Sports (AS.US), SharkNinja (SN.US), Monster Beverage (MNST.US), Philip Morris (PM.US), PepsiCo (PEP.US), Sprouts Farmers Market (SFM.US), Brinker International (EAT.US), McDonald's (MCD.US), and Shake Shack (SHAK.US); Goldman Sachs believes these stocks are worth holding as 2026 approaches. Meanwhile, Goldman Sachs has given "sell" ratings to U.S. stocks including Advance Auto Parts (AAP.US), Crocs (CROX.US), Clorox (CLX.US), Conagra (CAG.US), and Jack in the Box (JACK.US), as Goldman Sachs believes these companies' revenue growth may come under pressure