Goldman Sachs Predicts S&P 500 Index to Reach 5200 by Year-End 2023

20 February 2024 - 53 views

Goldman Sachs raised its year-end S&P 500 index target to 5200 from 5100, suggesting a 4% potential increase from current levels. This adjustment reflects increased profit estimates with a new 2024 EPS forecast of $241, an 8% upward revision surpassing forecasts. Expectations for higher economic growth and profits in tech and communication sectors are driving optimism. The focus is on earnings growth as a key driver of market performance, with risks highlighted.

[Inflationary Scenario]
[Significance: Medium]

1. Goldman Sachs raises S&P 500 index year-end target to 5200 from 5100, indicating 4% potential upside, citing increased profit estimates and $241 EPS forecast.
2. Despite the S&P 500 closing at 5005.56, down 0.4% for the week, optimism remains high due to strong economic growth expectations, particularly in the Information Technology and Communication Services sectors.
3. The bank highlights the performance of mega-cap stocks and foresees stable P/E valuation multiples, emphasizing that earnings growth will be the main driver of further upside this year.
4. Upside risks include stronger GDP growth and continued earnings surprises from mega-caps, while disappointing macroeconomic growth or underperformance from major stocks could lead to a pullback.
5. Goldman Sachs underscores the ability of corporates to maintain profit margins despite slowing inflation, signaling a positive outlook for S&P 500 profits in 2024.

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