These stocks could drag down your portfolio if oil keeps rising, Goldman says

Published Mon, Oct 4 20213:21 PM EDTUpdated Mon, Oct 4 20213:45 PM EDT

As oil prices jump to multiyear highs, Goldman Sachs put together a list of companies that could be vulnerable to higher input costs from soaring crude. International oil benchmark Brent crude on Monday broke above $81 per barrel for the first time since Oct. 2018, while West Texas Intermediate crude surged above $78 per barrel, hitting its highest level since 2014. The jump came as OPEC and its allies agreed to stick to a plan of gradual output hikes, despite growing worries that demand is outstripping supply. Demand for petroleum products has recovered as economies reopen and consumers hit the road. At the same time, supply has remained constrained. U.S. producers have been slow to return barrels to the market, while Hurricane Ida knocked some production in the Gulf of Mexico offline. "Higher oil prices are a tailwind to Energy EPS but a headwind to non-Energy sectors that rely on oil as an input or are sensitive to consumer spending," Goldman wrote in a note to clients. With this in mind, the firm put together a list of companies that are exposed to higher crude prices. Each name on the list has at least 15% of its total cost of goods sold levered to oil and oil derivatives. Retail gas station Murphy USA tops the list with 81% of its input costs exposed to oil, with Avient Corp. and Casey's General Stores coming in at 70%. Eastman Chemical , Sherwin-Williams and Allegiant Travel are other names on the list. Not surprisingly, there's also heavy representation from airline companies, including Spirit Airlines , Alaska Air , JetBlue , United Airlines , Southwest , American Airlines and Delta . Brent is up more than 55% for 2021, and Goldman Sachs doesn't see the rally slowing. The firm recently raised its year-end forecast on the benchmark to $90 per barrel from $80. But the effects on the overall market should be limited, the firm said. Chief U.S. equity strategist David Kostin noted that oil prices have a "roughly neutral" impact on aggregate S & P 500 earnings per share, in part because the sector is now such a small percentage of the overall S & P 500. "Every 10% increase in Brent prices boosts S & P500 EPS by just 0.3%," he wrote in a note to clients. "The boost from Energy to index EPS is likely smaller today, as it represents just 4% of S & P 500 2021[expected] EPS." Energy stocks are getting a boost from higher crude and natural gas prices. The sector gained about 2% on Monday in what was otherwise a down day for stocks. The S & P 500 energy sector was the only one that posted a gain in September. It's up 45% for 2021. —CNBC's Michael Bloom contributed reporting.

A customer leaves a Sherwin-Williams Co. store

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As oil prices jump to multiyear highs, Goldman Sachs put together a list of companies that could be vulnerable to higher input costs from soaring crude.