Goldman Sachs’ IPO barometer has hit a two-year high, rising to 119 in January, suggesting a revival in listings could be on the cards in the US.
The investment bank said excluding SPACs and spin-offs, there have been 10 initial offerings completed on US exchanges in 2024 with greater than $25 million of gross proceeds, eight of which were US-headquartered offerings.
These eight US-based IPOs raised a total of $1.9 billion in gross proceeds.
This pace of IPO activity, if sustained, would surpass the levels from 2022 and 2023, it said.
Goldman said its baseline macro forecasts suggest that the environment for IPO activity will continue to improve in 2024.
It expects the US economy will continue to grow, the nominal 2-year UST yield will decline modestly, and valuations will remain elevated relative to history.
If soft data improve to match the hard economic data and equity investor pricing of economic growth, it could lead to a further increase in its IPO Issuance Barometer in coming months, the investment bank suggested.
Goldman noted the performance of 2024 IPOs has been mixed, although the performance of recent IPOs is not a meaningful driver of IPO issuance.
For the 10 offerings on US exchanges, five stocks have risen beyond their offer price, while five stocks have declined relative to their offer price.
Goldman’s gauge is based on five components: S&P 500 drawdown, as measured by how far the index trades from its trailing 52-week high, CEO confidence, ISM Manufacturing Index, six-month change in the nominal 2-year Treasury note yield, and S&P 500 trailing EV/sales.