Major Wall Street analysts are revising their outlook on the S&P 500 and expect the index to beat its all-time high in late 2023 and early in the new year, though it has resisted the mark in recent weeks. Although the nine-week growth streak has been broken, the goal is close and the ‘blue chip’ will end up hitting it, as it still has some progress to make, even after growing 24% in the year ended.
A Goldman Sachs analyst team led by David Kostin expects results for the last quarter of 2023 to campaign. Expectations will be exceeded and furthermore, they believe that profits will continue to grow in the current year.
“We see upside potential for our earnings per share estimates thanks to strong growth in the US, low interest rates and a weak dollar,” he pointed out in commentary published by Bloomberg. This analysis expects earnings per share growth of 5% to $237 in 2024 for S&P 500 companies.
From RBC they see Goldman Sachs’ earnings per share of around $234, compared to slightly higher than the $232 previously expected. In this case, the analysis of Lori Calvacina, who already correctly predicted the rally of the year just passed, looks. Potential for the S&P 500 of 9.6% compared to Friday’s close of 4,697 points. That is, the index will reach 5,150 integers, which is an upward revision compared to its previous forecast.
UBS analysts are also more optimistic, even upgrading the potential of the ‘blue chip’. Since last closed They see a trajectory of 6.4% annually With reference to 5,000 integers. The reason is that the entity reinforces the soft landing approach in the US in addition to four rate cuts this year. Although the Federal Reserve (Fed) estimates only three, managers see at least another decline.
The S&P 500 has missed its all-time high in recent weeks, at 4,796.56 points in January 2022. Although it came very close to defeating them, it did not achieve it. All these analysts believe that the index will surpass its best mark this year. Although 2024 has started in the red and has snapped a nine-week rally, the stock market has potential.
However, there are also less optimists, such as Morgan Stanley’s Mike Wilson. Although he doesn’t rule out that equities may have a future, he believes There is little visibility on the horizon. It all depends on when the cuts start and how much, and till then the volatility and direction in the stock market will change.
To see the S&P 500 clearly rise, growth would have to be higher than current expectations, despite borrowing costs at higher levels this cycle. Then, the share price will increase significantly.
The results campaign will begin in the US this Friday and the big banks will start reporting for the last quarter of 2023. Balance sheet of companies It will reflect how the economy is digesting higher interest rates and private sector growth potential.