Goldman Sachs Raises S&P 500 Forecast for 2024, Expects Strong Earnings Growth
Goldman Sachs, one of Wall Street’s leading investment banks, has revised its S&P 500 forecast for next year, setting a new target of 5,100. This represents an increase from the previous target of 4,700 and suggests an 8% upside from the current level of the index.
Chief U.S. equity strategist at Goldman Sachs, David Kostin, believes that decelerating inflation and Federal Reserve easing will support a higher price-to-earnings (P/E) multiple for stocks. This positive outlook, driven by declining real rates, has been reflected in the S&P 500’s 15% gain since late October.
Goldman Sachs’ revised target aligns with other optimistic Wall Street forecasters who expect the index to rally to 5,200 by the end of next year. These bullish predictions signal confidence in the market and the potential for further growth.
Sell-side strategists, on average, have a target of 4,902 for the S&P 500 at the end of 2024. However, Goldman Sachs’ higher forecast reflects the market’s optimism, which has been fueled by the index’s strong performance in November and December, as well as expectations for continued Federal Reserve easing.
Goldman Sachs also sees upside potential for earnings per share growth, which is already higher than the Wall Street consensus. This positive outlook could create a more favorable environment for initial public offerings (IPOs) in 2024.
Additionally, falling interest rates may lead investors to shift their holdings from money-market funds to equities. Lower rates historically have been supportive for stocks with weaker balance sheets and small caps, making them attractive investment options.
Overall, Goldman Sachs’ raised forecast for the S&P 500 and its optimistic outlook for earnings growth indicate positive momentum for the market in 2024. Investors will be closely watching for further developments and potential opportunities in the coming year.
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