Why US Tax Reforms Could Boost Company Valuations

Morningstar are factoring in a cut in the corporate tax rate to 25%, which should increase company cash flows - but not all firms will benefit

Morningstar Analysts 3 October, 2017 | 3:23PM

US Congress

Last week, we got our first look at the framework of what potential tax reform could look like. It comes after President Donald Trump had urged Congress to start making progress on tax reform. He said now is the time to "simplify the tax code, reduce taxes very substantially on the middle class. And make our business tax more globally competitive."

Whether the administration can pass a substantial tax plan is, of course, still an open question. With promises of healthcare reform not yet coming to fruition and other issues distracting the administration from passing its agenda, no one can be certain that tax reform will happen or exactly what it will look like.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Johnson & Johnson142.37 USD-0.08
T. Rowe Price Group Inc127.27 USD3.61

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