Goldman Sachs strategists warn unprofitable US companies face heightened risks from elevated interest rates, hindering valuation upside through 2025.
Goldman Sachs strategists warn that unprofitable US companies face heightened risks from elevated interest rates, which could force them to raise capital or find an acquirer. Higher interest rates impose a larger discount on projected profits' present value, resulting in larger headwinds for unprofitable companies compared to typical stocks. The 10-year Treasury yield is expected to remain above 4% through 2025, constraining the potential valuation upside for unprofitable firms.
May 12, 2024
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