Goldman Sachs raises US stock target price again, S&P 500 index raised by 7.7%

Goldman Sachs strategist David Kostin's team has significantly raised their year-end forecast for the S&P 500 index from the previous 5200 points to 5600 points, with a 7.7% increase in the target price. The reason for this adjustment is that earnings revisions are lower than average and they now believe that a higher P/E multiple is reasonable.

In a report to clients on Friday, Kostin and his team stated:

We maintain our earnings estimates for 2024 and 2025, but the outstanding profit growth of five large tech companies has offset the typical pattern of negative earnings revisions.

Goldman Sachs strategists have raised the reasonable P/E multiple for the S&P 500 index from 19.5 to 20.4.

Goldman Sachs' latest forecast for the S&P 500, which is 3.1% higher than the index's closing price on Friday, suggests a potential slight upside.

This adjustment comes a month after Kostin reiterated the S&P 500 index target of 5200 points. At that time, he stated that there was no further upside for the US stock market by the end of this year. During this period, the US released cooling CPI and PPI data, with Wall Street generally expecting the Fed to cut interest rates at least twice this year, leading to a recent significant increase in US stocks.

Goldman Sachs' team released the initial target point for the S&P 500 index this year in November last year. The latest target of 5600 points is the third upward revision since the initial target was announced.