Goldman says these stocks will benefit from some provisions in the tax bill
Goldman Sachs is eyeing a handful of stocks that the firm thinks can be winners as a result of details in President Donald Trump's tax bill. Trump's plan, which just made it through the House of Representatives, extends the tax cuts from his first term that are set to expire in December but also contains new elements, like a temporary end to taxes on tips as well as $25 billion for his " Golden Dome " missile defense system. Economists argue that the bill will add trillions of dollars to the ballooning national debt , helping to spur a sharp rise in U.S. Treasury yields . The bill still faces an arduous path to approval in the Senate, where some Republicans want steep cuts to Medicaid as part of an agreement to support the legislation. The bill already includes what would be the largest ever cut to food stamps in the history of the Supplemental Nutrition Assistance Program (SNAP). But other provisions in the bill, if they remain in place, could prove a boon for some small cap stocks, according to Goldman Sachs analysts led by analyst Deep Mehta, citing an analysis of the legislation by Goldman political economist Alec Phillips. Some of the potential tailwinds include "full expensing of domestic factories," reinstating or extending earlier provisions in the 2017 tax law that allowed companies to fully expense capital spending on equipment and more generous deductibility of interest expenses. Goldman argues that small cap companies with high capital spending stand to benefit the most. "As we have noted before, small-caps tend to be more sensitive to tax policies given their higher domestic exposure, leverage levels, and tax rates," Mehta wrote in a Wednesday note. Here's a look at some of the small cap stocks that closely match up with several aspects of the proposed Congressional legislation described by Goldman. Stock in natural gas compression company Kodiak Gas Services was down 16% in 2025 through Thursday. About 90% of analysts polled by FactSet rate the stock a buy, with the Street's consensus price target implying 30% upside. "[We expect a] solid demand outlook for compression services in U.S. shale oil fields with Permian production growth proving to be more resilient than expected," Goldman analyst John Mackay wrote. He forecast stable capital spending for Kodiak, alongside better profit margins, which he said should support both free cash flow and the flexibility to buy back stock. KGS YTD mountain Kodiak Gas Services stock in 2025. Other possible beneficiaries include Shake Shack , whose shares through Thursday have fallen almost 10% so far in 2025. Analysts are pretty evenly divided on the burger chain, however, with 52% surveyed by FactSet rating it the equivalent of a buy. Other stocks on the Goldman screen of tax bill beneficiaries included home furnishing retailer RH , formerly Restoration Hardware, and automotive maintainence supplier Valvoline .
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Los Angeles Times
24 minutes ago
- Los Angeles Times
What will happen to food assistance under Trump's tax cut plan? A look at the numbers
President Trump's plan to cut taxes by trillions of dollars could also trim billions in spending from social safety net programs, including food assistance for lower-income people. The proposed changes to the Supplemental Nutrition Assistance Program would make states pick up more of the costs, require several million more recipients to work or lose their benefits, and potentially reduce the amount of food aid people receive in the future. The legislation, which narrowly passed the U.S. House, could undergo further changes in the Senate, where it's currently being debated. Trump wants lawmakers to send the 'One Big Beautiful Bill Act' to his desk by July 4, when the nation marks the 249th anniversary of the Declaration of Independence. Here's a look at the food assistance program, by the numbers: The federal aid program formerly known as food stamps was renamed the Supplemental Nutrition Assistance Program, or SNAP, on Oct. 1, 2008. The program provides monthly payments for food purchases to low-income residents generally earning less than $1,632 monthly for individuals, or $3,380 monthly for a household of four. The nation's first experiment with food stamps began in 1939. But the modern version of the program dates to 1979, when a change in federal law eliminated a requirement that participants purchase food stamps. There currently is no cost to people participating in the program. A little over 42 million people nationwide received SNAP benefits in February, the latest month for which figures are available. That's roughly one out of every eight people in the country. Participation is down from a peak average of 47.6 million people during the 2013 federal fiscal year. Often, more than one person in a household is eligible for food aid. As of February, nearly 22.5 million households were enrolled in SNAP, receiving an average monthly household benefit of $353. The money can be spent on most groceries, but the Trump administration recently approved requests by six states — Arkansas, Idaho, Indiana, Iowa, Nebraska and Utah — to exclude certain items, such as soda or candy. Legislation passed by the House is projected to cut about $295 billion in federal spending from SNAP over the next 10 years, according to the Congressional Budget Office. A little more than half of those federal savings would come from shifting costs to states, which administer SNAP. Nearly one-third of those savings would come from expanding a work requirement for some SNAP participants, which the CBO assumes would force some people off the rolls. Additional money would be saved by eliminating SNAP benefits for between 120,000 and 250,000 immigrants legally in the U.S. who are not citizens or lawful permanent residents. Another provision in the legislation would cap the annual inflationary growth in food benefits. As a result, the CBO estimates that the average monthly food benefit would be about $15 lower than it otherwise would have been by 2034. To receive SNAP benefits, current law says adults ages 18 through 54 who are physically and mentally able and don't have dependents need to work, volunteer or participate in training programs for at least 80 hours a month. Those who don't do so are limited to just three months of benefits in a three-year period. The legislation that passed the House would expand work requirements to those ages 55 through 64. It also would extend work requirements to some parents without children younger than age 7. And it would limit the ability of states to waive work requirements in areas that lack sufficient jobs. The combined effect of those changes is projected by the CBO to reduce SNAP participation by a monthly average of 3.2 million people. The federal government currently splits the administrative costs of SNAP with states but covers the full cost of food benefits. Under the legislation, states would have to cover three-fourths of the administrative costs. States also would have to pay a portion of the food benefits starting with the 2028 fiscal year. All states would be required to pay at least 5% of the food aid benefits, and could pay more depending on how often they make mistakes with people's payments. States that had payment error rates between 6-8% in the most recent federal fiscal year for which data is available would have to cover 15% of the food costs. States with error rates between 8-10% would have to cover 20% of the food benefits, and those with error rates greater than 10% would have to cover 25% of the food costs. Many states could get hit with higher costs. The national error rate stood at 11.7% in the 2023 fiscal year, and just three states — Idaho, South Dakota and Vermont — had error rates below 5%. But the 2023 figures are unlikely to serve as the base year, so the exact costs to states remains unclear. As a result of the cost shift, the CBO assumes that some states would reduce or eliminate benefits for people. The House resolution containing the SNAP changes and tax cuts passed last month by a margin of just one vote — 215-214. A vote also could be close in the Senate, where Republicans hold 53 of the 100 seats. Democrats did not support the bill in the House and are unlikely to do so in the Senate. Some Republican senators have expressed reservations about proposed cuts to food assistance and Medicaid and the potential impact of the bill on the federal deficit. GOP Senate leaders may have to make some changes to the bill to ensure enough support to pass it. Lieb writes for the Associated Press.
Yahoo
29 minutes ago
- Yahoo
Is Howmet Aerospace Inc.'s (NYSE:HWM) Recent Stock Performance Tethered To Its Strong Fundamentals?
Howmet Aerospace's (NYSE:HWM) stock is up by a considerable 35% over the past three months. Given the company's impressive performance, we decided to study its financial indicators more closely as a company's financial health over the long-term usually dictates market outcomes. In this article, we decided to focus on Howmet Aerospace's ROE. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Howmet Aerospace is: 26% = US$1.3b ÷ US$4.8b (Based on the trailing twelve months to March 2025). The 'return' is the income the business earned over the last year. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.26 in profit. See our latest analysis for Howmet Aerospace Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. Firstly, we acknowledge that Howmet Aerospace has a significantly high ROE. Secondly, even when compared to the industry average of 12% the company's ROE is quite impressive. As a result, Howmet Aerospace's exceptional 39% net income growth seen over the past five years, doesn't come as a surprise. As a next step, we compared Howmet Aerospace's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 14%. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Howmet Aerospace is trading on a high P/E or a low P/E, relative to its industry. Howmet Aerospace has a really low three-year median payout ratio of 8.9%, meaning that it has the remaining 91% left over to reinvest into its business. So it seems like the management is reinvesting profits heavily to grow its business and this reflects in its earnings growth number. Additionally, Howmet Aerospace has paid dividends over a period of eight years which means that the company is pretty serious about sharing its profits with shareholders. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to rise to 11% over the next three years. Despite the higher expected payout ratio, the company's ROE is not expected to change by much. In total, we are pretty happy with Howmet Aerospace's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
33 minutes ago
- Yahoo
‘A Total Sham': Michelle Obama's Nutrition Adviser Lets Loose on MAHA
Before there was MAHA, there was Michelle. Anyone following the rise of Robert F. Kennedy Jr.'s Make America Healthy Again movement can't help but recall former First Lady Michelle Obama's efforts to improve Americans' diets — and the vitriol she faced in response. Now, many of the same Republicans who skewered Michelle Obama as a 'nanny state' warrior have embraced the MAHA movement. To explore this head-spinning turn, I called up Sam Kass, the former White House chef under President Barack Obama and a food policy adviser wholed the first lady's 'Let's Move' initiative. Kass said he was happy to find common ground with Kennedy and his MAHA brigade where possible. But he argued Kennedy's HHS has done little to actually improve the health of the public so far, and was instead mostly taking steps that would do real damage, including by undermining the use of vaccines. Kass also warned potentially MAHA-curious food advocates against legitimizing the Trump administration by offering support for Kennedy. 'Those who are lending their voice for the things that they support are going to ultimately help enable outcomes that are going to be quite devastating for this country and for our kids,' he said in an interview with POLITICO Magazine. At the same time, Kass is not surprised with MAHA's growing popularity. In the 10-plus years since Kass left the White House, the issues of diet-related chronic disease haven't abated and Americans are more anxious about their health than ever. Wellness is a trillion-dollar industry, and MAHA influencers have filled the gap left by Democrats. 'The Democratic Party has absolutely blundered this issue,' he said. 'We're getting what we deserve here in some ways.' This conversation has been edited for length and clarity. How do you square the earlier conservative criticism of the 'Let's Move' initiative with the rise of MAHA? Are you surprised by the seeming contradiction? I think most of that is because Republicans are fearful of President Trump. And therefore, if he is putting somebody in a position of great power and backing him, there's a huge part of the party that's going to go along with whatever that may be. I don't think this is actually about the Republican Party taking this up. This is actually about a Democrat, traditionally, who had built up a pretty strong following on these issues, and decided to join forces with President Trump. It's not like any of these ideas are coming from the GOP platform. This is an RFK-led effort that they're now supporting. So are they hypocrites for that? Certainly. But I welcome Republican support on trying to genuinely improve the health of the nation. Frankly, if we had had that for the last 20 years, I think that cultural retention would be far better. The reality, though, is what they're actually doing I don't think is going to have any positive impact, or very little. Even what they're saying is problematic on some levels, but what they're doing is a far cry from anything that's going to create the health outcomes this country needs. When you say that, do you mean banning soda from SNAP or the food dyes issue? Are there specific things that come to mind? It's a long list. There's the critique that MAHA brings at the highest level, that chronic disease has exploded in our country. Nobody can refute that, and what we're eating is a big driver of poor health outcomes on many different levels. That is absolutely true. What we grow, how we're growing it, and what's being made out of it is quite literally killing people. That is something that First Lady Michelle Obama said way back when. I've been saying it for a couple of decades. After that, everything falls apart in my mind. We can start with food dyes as the biggest announcement they made thus far. I'm all for getting food dyes out of food. There's just not a basis of evidence that most of the ones that are being used are actually the drivers of many of these health conditions. It was reported that they were banning food dyes. Sadly, what they did was a total sham. It was a farce of an event. There was no policy at all that was announced. There was no guidance, there was no regulatory proposal, there wasn't even a request for information. There was absolutely nothing put forward to revoke the approvals of these dyes. And the reason I believe is that to revoke an approval, you have to show that it's harming the public health. That's what we did for trans fats. Trans fats had been approved for consumption. There was plenty of evidence to show that that food was really driving death and disease in the country, and we banned it through a regulatory mechanism. I could not fathom making an announcement like that without actually having a real policy to put in place. I didn't know whether to laugh or cry about what they did. Also, you see a bunch of the influencers holding up bags of Fruit Loops and saying, 'In Europe or Canada, these have no [synthetic] food dyes and ours do.' But the fact of the matter is Fruit Loops aren't good for you either way. Part of the danger of RFK is he keeps talking about gold standard science and rebooting our public policy and science. The reality is he's doing the exact opposite. He's going to fast food restaurants, touting them on national television as the head of Health and Human Services, [saying that] a cheeseburger and french fries is good for you now because it's cooked in beef fat which is just the most insane thing on literally every single level. It has absolutely no basis in science. We're focusing on issues that are absolutely not going to make an iota of difference in public health. It's absolutely shocking. They have a platform that is fear-based on certain issues, like these food dyes or seed oils, which are absolutely not addressing the core of what we're eating and the core of what's really harming our health. The problem is the fries and the cheeseburger. It's not the oil that it's fried in. It's actually quite scary to me to see what's playing out. Why do you think the politics of food have changed in the years since you were in the White House, and why do you think MAHA ideas have such appeal? I don't exactly know for sure. In the age of social media, the thing that gets the algorithms the most activity is more extreme views. I think people are very vulnerable to very compelling, very scientifically sounding narratives that [MAHA influencers] all have, based on one study here or another study there, that can weave a narrative of fear. It's not like food dyes are good, I'm happy to see them go. But you get people scared of what they're eating to the point where people stop eating vegetables because they're worried about the pesticides, which is just not good for their health. This fear is definitely taking hold. I think it's because the mediums on which this information travels are exacerbating that fear. You already mentioned the food dye announcement and why that was concerning to you. What are some of the other actions that you think aren't necessarily achieving the stated goals? If you step back and start to look at what actions have actually been taken, what you're actually seeing is a full-on assault on science throughout HHS. You're seeing a complete gutting of NIH, which funds much of the research needed to understand what in hyper-processed foods is undermining people's health and how to actually identify those correlations so you can regulate it very aggressively. You're seeing the complete gutting or elimination of departments within CDC and FDA that oversee the safety of our food. Food toxicologists have been fired. There's a department in CDC that's in charge of assessing chronic health and environmental exposures to toxins. Those offices have been eliminated. The idea that somehow you're going to be more aggressively regulating based on the best science, while you're absolutely wholesale cutting scientific research and gutting the people who are in charge of overseeing the very industry that you're trying to clamp down on is a joke. Then look at the 'big, beautiful bill' that is being supported by this administration, and it's catastrophic to the public health of the United States of America. Eight million people are going to lose access to health care. Three million plus are going to lose SNAP assistance. Then we can get into USDA and EPA. Everybody's got to remember that the number one threat to the public health of the United States of America is climate change. If we continue on this path of pulling back every regulatory effort that's been made to try to transition our society to a much more sustainable, lower-carbon world, that's also preparing itself to deal with the volatility that's coming from the climate, we're not going to have food to eat. This idea that you're going to have big announcements about food dyes and Fruit Loops, while you completely roll back every effort to prepare our agricultural system and our food system to deal with climate change, you're gaslighting the American public. Have you spoken to the former first lady about MAHA at all? Not in any kind of depth. Have you ever been in touch with Kennedy? Have you ever talked to him about these issues? He's very close to a number of people I'm good friends with, but no, I have not. You noted Kennedy used to be a Democrat. His issues — his opposition to pesticides, his support for healthy nutrition, with all the caveats that we just discussed — these were Democratic issues. Now, this MAHA coalition helped Trump win the White House. Why do you think Democrats have ceded this terrain? The Democratic Party has absolutely blundered this issue. These are kitchen table issues. Our very well-being, our ability to eat food that's not harming ourselves and our kids, is fundamental to life on planet Earth and what it means to have a vibrant society. The fact that Democrats, much to my chagrin, definitely not because of lack of trying, have not taken this issue up with great effort over the last 15 years is shameful. We're getting what we deserve here in some ways. I'm deeply critical of Democrats, with some exceptions. Sen. Cory Booker has been amazing on these issues. [Former Sen.] Jon Tester is also great. But it was never part of the platform, and it absolutely always should have been. If there's some common ground to be found with Republicans, then great. We could get a lot done. But we can't just turn over the keys to this issue to people who are not serious. When you worked in the Obama White House, you pushed better nutrition labeling, active living, bans on unhealthy foods in school meals and trans fat. The recent MAHA report pointed the finger at similar programs for chronic illness. Is that a place where you and MAHA advocates are on the same page, and how do you balance that with the concerns you've raised? There's no clean answer to that. We largely, not entirely, share the same critique when it comes to food. Vaccines are another thing which are important to also talk about. People are trying to pick the issue that they like and can get around and pretend like the rest isn't happening. It would be great if we got food dyes out, but it would pale in comparison to if he continues down the path to undermine vaccines as the foundation of public health and people start dying, like they are, with measles. That is not even close to a trade. For all of my food friends who read this, or everybody in policy who are like, 'Oh yeah, I can work with him on this issue, but I'm going to turn a blind eye to that,' that doesn't work. That's going to lead to devastating outcomes. On the report, I share the general critique of the problem. I spent my life saying those things and working on these issues. That's the easy part. What matters is what you do about it. How do you actually change what people are eating, and what is it going to take to really put the country on a different trajectory when it comes to health? So far, I've seen absolutely no indication that the issues that they're focused on are going to have any meaningful or measurable impact on public health. Frankly, there's many other things that I think are going to be extremely detrimental. We will see. We're only a few months in. I could, depending on what happens, have a different perspective in six months or 12 months. RFK has blamed the food industry for Americans' poor health. He's argued that government institutions are overwrought with corporate influence. Do you think he's right? And what do you think about RFK's approach to trying to curb corporate influence? I'm all for curbing corporate influence. I had some big fights with industry. I won some of them, and sometimes I got my ass kicked. It's the nature of Washington when you're threatening the basic interests of an industry. What's stunning to me is that the food industry so far has been silent. They haven't done anything to fight back, which says to me that they're not feeling threatened yet. I think they're waiting to see what's going to happen. I'm sure they're doing some stuff in the background, but this is nothing like what we were dealing with. I agree that we should put the public's best interest first, not succumb to industry influence. I think the way that RFK talks about it is a real overstatement down a very dark conspiracy theory. The idea that JAMA and the American Medical Association and the New England Journal are just like corporate journals that just put corporate, completely distorted research out for the sake of making profits, it's just not serious. He starts to discredit the very institutions, like HHS, that you actually need to do the work to rein in industry. The way that industry does make inroads is that they fund a lot of research. If you want to reduce industry influence, you should dramatically increase [government] investment in funding of scientific research on agriculture and climate change, on food and nutrition. One of the biggest fights in the Obama era was over stricter nutrition standards for school lunches. The administration won some of those battles, but quite a few children still have obesity, according to the latest data. Is there anything you wish the Obama administration had done differently? Are there things policymakers should be doing differently? School nutrition is just one part of a young person's diet. You're not going to solve kids' health issues just through school nutrition, but obviously it's a huge lever to pull. If we really want to make progress, you have to look much more holistically at the food environment that people are living in. This is generational work. It's going to take literally decades of work to shift, not just the policies, but our culture, our businesses, to change how people are eating. I think the one thing we missed would have been a much stricter restriction on sugar across the board. We had it for drinks,, but we didn't [apply it across the board], and that was a miss. We should have pushed harder on sugar. I think the policy was a really important start. It can always be improved and strengthened. Both the first Trump administration and this one are looking to roll back some of that. The thing that we have to not forget — and this is true for schools, and certainly true for SNAP and WIC — is the biggest problem is not enough money for these programs. I started doing a lot of work on finding ways to restrict sugary drinks as an example from the SNAP program. But if you want to do that and actually get the health outcomes you need, you need to also increase the total dollar amount that people have so they can purchase healthier food. Part of the reason why people are drinking these things is they're the cheapest available drink. Coke is cheaper than water sometimes. RFK recently called sugar 'poison.' Do you agree with that? One of their tactics to obfuscate truth in science is dosage, right? The amount that we're consuming matters. If you had a birthday cake on your birthday and you have a cookie — my kids eat a cookie, they're not dying, they're not being poisoned to death. They're fine. I think the problem is the amount of sugar we're consuming and the sizes of the portions we have. It's the cumulative amount of sugar. It's probably technically not exactly the right word, poison. But I don't take issue with that. I think the levels of sugar consumption for young people are deeply alarming and are absolutely going to drive preventable death and disease for millions and millions of people. It already is and will continue to do so. It is a very serious problem. But what do you do? I can't wait to see the policy proposals here. It's a tough problem to solve. It is not a problem that can be solved overnight, and it's going to take a very comprehensive effort to really shift the amount of sugar we're consuming, but it should be the goal of this administration. They should work very hard at it in a very serious and science-based way. Thus far, I have not seen that.
