Goldman Sachs trimmed its 2026 earnings growth forecast for the MSCI emerging markets index by two percentage ​points to 23%, ⁠citing pressure on equity markets from the ongoing Middle East ‌conflict.

The brokerage lowered the benchmark index's 3-month and 6-month target to 1520 and 1580 ​from 1570 and 1600 previously, but reiterated its 12-month target of 1680.

The MSCI EM ​index last ​closed at 1469.47 on Friday. 

* The Wall Street brokerage expects 2026 earnings-per-share (EPS) for the benchmark index at $112 about 2% lower ⁠than its prior forecast, reflecting its 23% EPS growth.

* Goldman also estimated a $30 per barrel rise in oil prices could reduce the index earnings by about 3%-4%.

* "We think the near-term path could remain challenging as markets attempt ​to gauge ‌the length ⁠and severity of ⁠damage to energy infrastructure and disruption to transit through the Strait of Hormuz," Goldman said ​in a note on Friday.

* Excluding the ‌tech/AI markets of Korea and Taiwan, EM (excluding ⁠North Asia) offers 11% EPS growth compared to its prior forecast 13%.

* Within EM, Goldman expects Middle east and North Africa (MENA) region to take the sharpest hit to earnings followed by India.

* The brokerage expects EM North Asia to remain resilient and Latam could see 'modest' earnings upgrades as they benefit from higher energy and metal prices.

* The brokerage remains "strategically constructive" on EM equities and continues to recommend diversified exposure ‌across regions, balancing tech-heavy North Asia with domestic-oriented EM markets.

* Goldman ⁠upgraded the EM energy sector to "neutral" from "underweight" rating ​citing near-term earnings tailwinds from higher oil prices.

* On the other hand, the brokerage downgraded real estate to "neutral" from "overweight" given risks to the UAE ​real estate sector - ‌which accounts for nearly a third of the ⁠regional real estate weight.

(Reporting by Joel ​Jose and Siddarth S in Bengaluru; Editing by Nivedita Bhattacharjee)