- The S&P 500’s record gains this year have sparked a wave of price target hikes on Wall Street.
- The most bullish price target for the S&P 500 is Evercore ISI at 6,000, implying an upside of about 7%.
- Key bullish factors include the benefits of AI, consumer resilience, and impending interest rate cuts from the Federal Reserve.
The S&P 500 has soared this year, with the index up about 15% in the first half of the year to a record high.
As we enter the second half of 2024, Wall Street strategists are updating their year-end price targets for the S&P 500, with nearly all of them raising their forecasts and leaning more bullish.
The average year-end price target for the S&P 500 is $5,429, with the midpoint at $5,600, according to Bloomberg data. The S&P 500 was trading around $5,630 on Friday.
These are the latest stock market predictions from Wall Street’s most bullish strategists.
Evercore ISI: S&P 500 target price of 6,000
Evercore ISI strategist Julian Emanuel raised his year-end price target for the S&P 500 to 6,000 from 4,750 last month, moving from bear to Wall Street’s biggest bull.
Emanuel’s price target implies that the S&P 500 could rise 7% between now and the end of the year, which would amount to a 26% gain for the year.
“We’re still in the early stages of the AI ​​revolution,” Emanuel said, which should translate into continued strength in revenue growth. Emanuel projects S&P 500 EPS growth of 8% in 2024 and 5% in 2025.
“The pandemic changed everything. Record stimulus, rising household cash balances and low leverage supported consumers. Then along came AI. Today, the productivity potential of the AI ​​generation is shifting across every job and sector. Slowing inflation, a Fed willing to cut rates and steady growth have kept the Goldilocks economy in good shape,” Emanuel said.
Stock market valuation multiples may be high, but they are justified, Emanuel said.
“The high multiple is supported by the company’s track record of controlling costs and maintaining or expanding margins,” Emanuel explained.
Oppenheimer: S&P 500 target price is 5,900
Oppenheimer strategist John Stoltzfus this month raised his year-end price target to 5,900 from 5,500, citing the continued recovery of U.S. consumer spending.
“As always, this is about fundamentals, and this is where we are at right now, it’s about fundamentals,” John Stoltzfus, chief investment strategist at Oppenheimer, told CNBC. “The resilience of the consumer has been pretty strong even as the economy has slowed, the resilience of businesses, job growth, wage growth.”
The key is that the potential gains are not being driven by short-term investors, but rather by long-term investors who need somewhere to park their retirement savings, making stocks the likely winners.
“This is being driven largely by medium- to long-term investors, some of whom are realizing that there is a real threat to the stability of Social Security and that people need to play a role in their own retirement,” Stoltzfus said.
Yardeni Research: S&P 500 target price of 5,800
Yardeni Research this week raised its year-end S&P 500 price target to 5,800 from 5,400.
Strategist Eric Wallerstein said the combination of a $6 trillion cash surplus and an imminent interest rate cut by the Federal Reserve should boost stocks.
“We’re still targeting the SPX 8000 for the decade ahead. Our ‘Roaring 2020s’ scenario is just priced in sooner than we expected. We don’t think a rate cut is necessary, but with 2% Q2 GDP and $6.15 trillion in money market funds, a rate cut would further accelerate the meltup,” Wallerstein said Thursday.
Wallerstein added that unlike the dot-com bubble of 2000, corporate profits are currently soaring, which should lead to sustained gains in stock prices.
Moreover, Wallerstein said, as the benefits of AI begin to trickle down to companies outside the technology sector, the stock market rally should extend beyond mega-cap tech stocks.
Ned Davis Research: S&P 500 target price 5,725
Following the stock market’s strong gains this year, Ned Davis Research raised its year-end target price for the S&P 500 to 5,725 from 4,900 last month.
The research firm said that as long as profit growth continues to accelerate, even slightly, stock prices should continue to rise.
“Slow earnings acceleration continues, the economy and inflation appear to be calm enough for the Fed to cut interest rates, and markets tend to enjoy a year-end rally in presidential election years,” said Ed Clissold, strategist at NDR.
Goldman Sachs: S&P 500 target price is 5,600
Goldman Sachs strategist David Kostin last month raised his price target for the S&P 500 to 5,600 from 5,200. The bank had initially forecast the index to end the year at 5,100.
Kostin raised his target price but warned that returns over the next six months could be flat due to a concentration in large tech companies and the possibility of slowing earnings growth in the second half of the year.
“Our 2024 and 2025 earnings forecasts remain unchanged, but impressive earnings growth in five large tech stocks offset the typical pattern of downward revisions to consensus EPS estimates,” Kostin said.
UBS: S&P 500 target price of 5,600
UBS raised its target price for the S&P 500 to 5,600 from 5,400 in May, after the bank raised its target price in February.
The bull market was driven by the economy showing no signs of recession and a strong GDP growth outlook.
“Since then, the consensus 2024 GDP forecast has risen from 1.6% to 2.4%,” wrote the analysts, led by Jonathan Golub. “At the same time, recession/tail risks have declined in several key indicators, including the survey of economists and the Chicago Fed’s Financial Conditions Index.”
UBS also raised its earnings per share forecast for this year to $245 from $240, and for 2025 to $260 from $255.
The average S&P 500 earnings per share target for 2024 is $242, according to Bloomberg data.
