Goldman raises year-end S&P 500 target to 4,500, anticipates upside
Goldman Sachs has raised its year-end target on the S&P 500 to 4,500 as the rally of the broad market is going beyond just the largest tech names. The move represents a 5% increase from the current levels on the index and is an upgrade from Goldman’s previous target of 4,000. As per the chief U.S. equity strategist of the investment bank, David Kostin’s, note issued on Friday, the firm is maintaining its 2023 earnings-per-share forecast for the index at $224, assuming a soft landing, which is higher than the top-down consensus of $206. Although a few mega-cap tech stocks, including Apple, Microsoft, and Amazon, are the highest flyers in the S&P 500 this year, other sectors are also perking up.
The S&P 500 gained 0.1% on Friday, bringing it up 12% this year. During the session, the index hit the 4,300 threshold briefly, a level it has not touched since August. Kostin added that “the P/E multiple of 19x is greater than we expected, led by a few mega-cap stocks. But prior episodes of sharply narrowing breadth have been followed by a ‘catch-up’ from a broader valuation re-rating.”
Check out CNBC’s Market Strategist Survey to see Wall Street’s latest year-end targets. CNBC’s Michael Bloom contributed to this report.
FAQs:
What does it mean that Goldman Sachs raised its year-end target for the S&P 500?
Goldman Sachs raised its year-end target on the S&P 500 to 4,500. It signifies a 5% increase from the current levels on the index.
What is the chief U.S. equity strategist’s earnings-per-share forecast for the index?
David Kostin’s earnings-per-share forecast for the S&P 500 index is $224 by 2023, assuming a soft landing.
Is the S&P 500 performing well this year?
Yes, the S&P 500 is up nearly 12% this year.
What does the note by David Kostin say about the mega-cap tech stocks?
Kostin’s note said that the P/E multiple of 19x is greater than the bank’s expectation, led by a few mega-cap stocks. But, prior episodes of sharply narrowing breadth have been followed by a ‘catch-up’ from a broader valuation re-rating.
Goldman increases anticipated year-end S&P 500 target to 4,500, predicts positive growth potential.
Goldman Sachs has increased its year-end target on the S&P 500 to 4,500, thanks to a broadening rally that’s going beyond the largest tech names. This new target provides roughly 5% upside from current levels on the broad-market index and is up from Goldman’s previous target of 4,000. David Kostin, Chief US equity strategist, wrote in a note on Friday that the firm is holding steady on its 2023 earnings-per-share (EPS) forecast for the index, keeping it at $224. The EPS prediction assumes a soft landing and is higher than the top-down consensus of $206. Kostin acknowledged that the P/E multiple of 19x is greater than expected, led by a few mega-cap stocks; however, prior episodes of sharply narrowing breadth have been followed by a “catch-up” from a broader valuation re-rating. The S&P 500 has seen a nearly 12% rise this year, with a modest 0.1% gain on Friday that briefly breached the 4,300 threshold during the session, a level it hasn’t touched since August. While Big Tech stocks like Apple, Microsoft, Amazon, Nvidia, Meta, and Tesla remain amongst the highest fliers in the S&P 500 this year, other sectors are also beginning to pick up. The Utilities Select Sector SPDR Fund (XLU), for example, has risen roughly 2% this week. To see Wall Street’s latest year-end targets, check out CNBC’s Market Strategist Survey here.