Goldman Sachs strategists said that given the improved earnings outlook for the S&P 500 index companies, by the end of this year, the S&P 500 could grow by about 4%, to 5,200 points (on Friday, the S&P 500 ended trading at 5005.57 points). Thus, the strategists improved their previous forecast, presented in mid-December, which assumed an increase in the index to 5,100 points. Goldman’s price target for the S&P 500 in 2024 is now among the highest on Wall Street.
According to Goldman Sachs estimates, in 2024, the profits of companies from the S&P 500 index will grow by 8% amid improved prospects for the US economy, stronger mega-cap profit margins, growth in artificial intelligence and consumer strength. Strategists said that the Magnificent 7 stocks are likely to post the strongest earnings growth among S&P 500 sectors. Meanwhile, strategists upgraded their earnings-per-share forecast for the year to $241 and $256 in 2025, from $237 and $250 previously.
Since the beginning of this year, the S&P 500 index has grown by 4.9%, helped by a reassessment of the Fed's monetary policy easing prospects and optimism about artificial intelligence that has sparked a rally in technology stocks. In January, the S&P 500 index exceeded its historic peak for the first time in two years, while the Nasdaq 100 index hit its first record in a similar span back in December.