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The S&P 500’s record high this year has sparked a wave of target price increases from Wall Street.
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The most bullish price target for the S&P 500 is 6,000 from Evercore ISI, representing a gain of about 7%.
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Key upside factors include the benefits of artificial intelligence, consumer resilience, and an impending interest rate cut by the Federal Reserve.
the Standard & Poor’s 500 Real estate prices have soared this year, with the index jumping about 15% to record highs in the first half.
As the second half of 2024 begins, Wall Street strategists are updating their year-end price targets for the S&P 500, and almost all of them are leaning higher as their expectations increase.
While the average year-end price target for the S&P 500 is 5,429, according to Bloomberg data, the average year-end price target is 5,600. The S&P 500 was trading around 5,630 on Friday.
These are the updated stock market forecasts from some of Wall Street’s most bullish strategists.
Evercore ISI: S&P 500 Price Target of 6,000
Julian Emanuel, Evercore ISI Strategist Go from bear to biggest bull on Wall Street When he raised his year-end price target for the S&P 500 last month to 6,000 from 4,750.
Emmanuel’s price target represents a potential 7% upside for the S&P 500 between now and the end of the year, and a full-year gain of 26%.
“The AI revolution is just beginning,” Emanuel said, and that is expected to drive continued strong earnings growth. Emanuel expects S&P 500 earnings per share to grow 8% and 5% in 2024 and 2025, respectively.
“The pandemic changed everything. Record stimulus, high household cash balances, and low leverage supported consumers. Then came AI. Today, the productivity potential of the AI generation is looming in every job and sector. The backdrop of slowing inflation, the Fed’s determination to cut interest rates, and steady growth has supported the Goldilocks model,” Emanuel said.
Although the stock market valuation multiples may be high, Emmanuel says they are justified.
“The high multiples are supported by the companies’ track record of managing costs and maintaining and growing margins,” Emmanuel explained.
Oppenheimer: S&P 500 price target is 5,900
Oppenheimer’s strategist John Stoltzfus Raised its year-end price target to 5,900 from 5,500. This month, driven by continued resilience among the US consumer.
“As before, it’s about fundamentals, where you stand now,” John Stoltzfus, chief investment strategist at Oppenheimer, told CNBC. “That includes consumer resilience, even as the economy slows, and there’s a lot of resilience there — business resilience, job growth, wage growth.”
It is important to note that the potential gains are not driven by short-term investors, but by long-term investors who have to put their money somewhere to fund their retirement, and stocks are likely to be the winners.
“This is largely driven by medium- to long-term investors, some of whom are just citizens who realize that there are real threats to the stability of Social Security, and people who realize that they need to play a role in their retirement,” Stoltzfus said.
Yardeni Research: S&P 500 Price Target is 5,800
Yardeni Research raised its year-end price target for the S&P 500 to 5,800 from 5,400 this week.
The combination of $6 trillion in cash on hand and an impending interest rate cut by the Federal Reserve should send stock prices higher, said strategist Eric Wallerstein.
“We still target the S&P 5000 by the end of the decade,” Wallerstein said Thursday. “The roaring 2020s scenario is being pushed back more quickly than we anticipated. We don’t think a rate cut is necessary, but with Q2 GDP at 2% and $6.15 trillion in money market funds, a rate cut would fuel further collapse.”
In contrast to the dot-com bubble in 2000, corporate profits are now booming, which should lead to sustained gains in stock prices, Wallerstein added.
Additionally, Wallerstein said the stock market rally should extend beyond large-cap tech stocks, as the benefits of AI begin to trickle down to companies outside the tech sector.
Ned Davis Research: S&P 500 Price Target is 5,725
The strong rally in the stock market this year has led Ned Davis Research to raise its year-end price target for the S&P 500 to 5,725 from 4,900 last month.
As long as earnings growth continues to accelerate, even slightly, that should lead to continued higher stock prices, the research firm said.
“The modest earnings acceleration continues, the economy and inflation appear to be benign enough to allow the Fed to cut its benchmark interest rate, and the market tends to enjoy a year-end rally during presidential election years,” said Ed Clissold, NDR strategist.
Goldman Sachs: S&P 500 price target is 5,600
David Kostin, Goldman Sachs strategist He raised his price target on the S&P 500 to 5,600 from 5,200 last month. The bank initially expected the index to end the year at 5,100.
Although Kostin raised his price target, he cautioned that heavy concentration in large-cap technology companies and a potential slowdown in earnings growth in the second half of the year could lead to flat returns over the next six months.
“Our 2024 and 2025 earnings estimates remain unchanged, but impressive earnings growth from five large-cap tech stocks has offset the usual pattern of negative revisions to consensus EPS estimates,” Kostin said.
UBS: S&P 500 price target is 5,600
UBS raised its price target for the S&P 500 to 5,600 from 5,400 in May, after raising its target in February.
This rise came thanks to the absence of any signs of recession in the economy and strong expectations for GDP growth.
“Since then, the consensus forecast for 2024 GDP has risen from 1.6% to 2.4%. Meanwhile, recession/downside risks have declined on a number of key metrics including economic surveys and the Chicago Fed’s financial conditions index,” analysts led by Jonathan Golub wrote.
UBS also raised its earnings per share forecast to $245 from $240 this year and raised its 2025 estimate to $260 from $255.
According to Bloomberg data, the average S&P 500 EPS target for 2024 is $242.
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