Goldman Sachs recently published research raising stock index price targets and 2025 and 2026 earnings estimates. Revised estimates suggest a stronger-than-expected economic outlook for the coming years.

Key takeaways from Goldman:

• Upgraded earnings estimates: Raised 2025 EPS forecast to $268 (+11% year-over-year) from $256 (+6%). Additionally, GS introduced a 2026 EPS estimate of $288 (+7%).
• Maintaining 2024 forecast: Full-year 2024 EPS forecast of $241 (+8%) remains unchanged.
• No change in valuations expected: GS anticipates the current market P/E multiple of 22x will be unchanged at year-end 2024.
• Revised index targets: Given the upgraded earnings outlook, GS raised the year-end 2024 index target to 6000 (from 5600) and the 12-month target to 6300 (from 6000). This implies a potential upside of 4% and 10%, respectively.

Reasons for the optimism

Signet is likewise bullish on the S&P 500’s prospects, based on several factors, including:

• Strong economic fundamentals: We believe the economy is positioned for continued growth, which will support corporate earnings.
• Favorable market conditions: Current market conditions, such as interest rates and inflation, generally support equity investments.
• Positive corporate outlook: We’re optimistic about the overall health and prospects of S&P 500 companies.

In conclusion, we believe that the S&P 500 is well-positioned for continued growth in the coming years. Goldman’s revised estimates reflect this positive outlook and suggest potential upside.

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