[ad_1]
(Bloomberg) — Just months after setting a 2024 target for the S&P 500 index, Goldman Sachs Group Inc. strategists raise their forecasts again after the stock market crossed the key 5,000 milestone this month. Ta.
Most Read Articles on Bloomberg
“Increased earnings expectations are the driving force behind the revision,” David Kostin and his team said in a note to clients on Friday.
Kostin now sees the S&P 500 index rising to 5,200 by the end of this year, raising his forecast by about 2% from the 5,100 level he predicted in mid-December. The new target suggests a 3.9% rise from Friday’s close.
He originally predicted in November that the S&P 500 index would reach 4,700 by the end of this year.
Goldman’s 2024 S&P 500 price target of 5,200 is currently among the highest on Wall Street, with Tom Lee of Fundstrat Global Advisors and John Stoltzfus, chief strategist at Oppenheimer Asset Management has joined the ranks of Wall Street bulls. Both men will end the year similarly. Outlook.
The company’s strategists raised their earnings per share forecast for this year to $241 and $256 in 2025, from $237 and $250. This reflects expectations for “stronger economic growth and higher profits” for the information technology and communications services sector, which includes five of the so-called Magnificent Seven stocks such as Apple Inc., Microsoft Inc., Nvidia Inc. and Alphabet Inc. are doing. The new estimate is above the median forecast of $235 from top-down strategists.
The company’s strategists expect valuation multiples for the S&P 500 and similar stocks to remain close to current levels at 20x and 16x P/E, respectively, noting that “earnings growth will maintain this year’s upside. “It will be the main driving force.”
The S&P 500 index has risen 4.9% this year, as hopes for a dovish policy shift from the Federal Reserve and optimism about artificial intelligence boosted tech stocks. The 500-member group’s profits are expected to rise 8.8% from a year ago in 2024, according to data compiled by Bloomberg Intelligence.
The S&P 500 hit a new two-year high in January, and the Nasdaq 100 hit a new high in December for the first time in a similar period after the Federal Reserve signaled that its aggressive rate hikes to curb inflation were likely over. The highest value was recorded. Reductions are being considered for 2024.
Wall Street peers such as Bank of America have signaled that they may also raise their year-end targets, believing investors are not optimistic enough. The median target for the S&P 500 index by more than a dozen equity strategists tracked by Bloomberg currently stands at 4,950 through mid-January.
“The biggest risk to the S&P 500 in the near term is upside,” Savita Subramanian of Bank of America told Bloomberg TV earlier this month. She said: “Our target of 5,000 people is probably too low in the short term.”
Even Morgan Stanley’s Michael Wilson, one of Wall Street’s most prominent bears, believes that the U.S. stock market rally is currently getting less love than the big tech companies that have dominated previous bull markets. We expect it to expand into fields where it is not currently available. His 2024 target remains at 4,500, implying a decline of about 10% from Friday’s close.
–With assistance from Elena Popina.
(Adds context to fifth paragraph.)
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
[ad_2]
Source link
