Goldman raises S&P 500 year-end forecast, citing strong earnings growth

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Stock Markets,S&P 500 Index,Microsoft Corp

The investment bank's strategist said the S&P 500 can end 2024 at 5,600.

Goldman Sachs sees upside for the S & P 500 for the rest of this year as corporate earnings strengthen. Chief U.S. Equity Strategist David Kostin hiked his year-end S & P 500 price target by 400 points, or about 7.7%, to 5,600. That new forecast implies that the broad index can rise about 3% from where it finished last week, equating to a total return of more than 17% for the full year. There are two main drivers for Kostin's call.

That helps explain the narrow leadership in the current market rally. However, he said that gap is supposed to narrow from 31 percentage points in all of 2024 to just 8 points in 2025 and 4 in 2026, based on consensus earnings estimates. Goldman also updated its target for three and 12 months down the line. Kostin's expectation of 5,400 in three months would mean that the index would pull back by less than 1%, while the 5,700 outlook implies a 4.9% gain.

 

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