Goldman says these stocks will benefit from some provisions in tax bill

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Goldman says these stocks will benefit from some provisions in 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

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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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