NEW YORK (AP) — Goldman Sachs Group Inc. strategists have raised their forecast for the S&P 500 Index, reflecting a more positive outlook for earnings on Wall Street. The team led by David Kostin cited increased profit estimates as the reason for the revision, noting that 12-month forward earnings expectations for the US stock index are at a record high.
Kostin’s new prediction sees the S&P 500 reaching 5,200 by the end of the year, reflecting a 3.9% rise from Friday’s close. This is an increase from the 5,100 level that was forecasted in mid-December. Previously, the firm had projected the S&P 500 to hit 4,700 by the end of the year, but the gauge has already surpassed the 5,000 milestone this month.
Goldman’s 5,200 price target for the S&P 500 in 2024 is now one of the highest on Wall Street. The firm’s strategists also upgraded their earnings-per-share forecast for the year to $241 and $256 in 2025, reflecting their expectation for stronger economic growth and higher profits for the information technology and communication-services sectors.
The ongoing earnings season has so far seen 79% of firms beat expectations out of the nearly 84% of the S&P 500’s market capitalization that have reported. The reporting period was mixed for some of the tech giants, with some exceeding expectations while others disappointed investors.
The S&P 500 Index has climbed 4.9% this year, driven by expectations of a dovish policy shift by the Federal Reserve and optimism in the tech sector. Additionally, Wall Street peers at Bank of America Corp. have signaled their willingness to potentially raise their year-end targets as well on the idea that investors aren’t optimistic enough.
Overall, the outlook for the S&P 500 is positive, with various Wall Street analysts expressing confidence in the upward trajectory of the stock index.