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Tuesday, February 20, 2024

Goldman Lifts S&P 500 Goal With Revenue Optimism to Drive Rally


Simply months after setting a 2024 goal for the S&P 500 Index, Goldman Sachs Group Inc. strategists have boosted their forecast for a second time, reflecting Wall Road’s optimistic outlook for earnings.

“Elevated revenue estimates are the motive force of the revision,” a crew led by David Kostin wrote in a word to shoppers dated Friday. The 12-month ahead earnings expectations are at a document excessive for the U.S. inventory index after forecasts bottomed out a yr in the past.

Kostin now sees the S&P 500 gaining to five,200 by the top of this yr, implying a 3.9% rise from Friday’s shut, elevating his forecast from the 5,100 stage he predicted in mid-December.

He initially projected in November that the S&P 500 would hit 4,700 by the top of this yr, however the gauge has already eclipsed the numerous 5,000 milestone this month.

Goldman’s 5,200 worth goal for the S&P 500 in 2024 is now among the many highest on Wall Road, becoming a member of the ranks of bulls together with Tom Lee of Fundstrat World Advisors and Oppenheimer Asset Administration chief strategist John Stoltzfus, who each maintain the same year-end outlook.

Raising Estimate | Goldman strategists up their year-end target to 5,200 from 5,100

The agency’s strategists upgraded their earnings-per-share forecast for the yr to $241 and $256 in 2025, from $237 and $250 beforehand.

That displays their expectation for “stronger financial development and better earnings” for the data know-how and communication-services sectors, which comprise 5 of the so-called Magnificent Seven shares together with Apple Inc., Microsoft Corp., Nvidia Corp., Alphabet Inc. and Meta Platforms Inc.

The brand new estimate sits above the median top-down strategist forecast of $235.

The continuing earnings season has up to now reaffirmed what bulls have been anticipating all alongside: earnings are holding up effectively.

Out of the close to 84% of the S&P 500’s market capitalization which have reported up to now, 79% of corporations beat expectations.

Traders have broadly rewarded these shares, which outperformed the benchmark by a median of 0.7% on the day of outcomes, in keeping with knowledge compiled by Bloomberg Intelligence.

The reporting interval was blended for the Magnificent Seven. Whereas Meta, Amazon and Microsoft exceeded expectations, Tesla Inc. disenchanted and Apple flagged weak point in China.

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