S&P 500 index hit a record high again. Following Goldman Sachs's target of 5600 points, which equals the most optimistic level on Wall Street's major banks, Evercore ISI has gone further and set a new high for its forecast. The organization claims that by the end of 2024, the index will once again experience double-digit growth. Julian Emanuel, chief stock and algo strategist, raised his year-end prediction on the S&P 500 to 6000 points, ranked first among the major stock strategists tracked by Bloomberg, which is approximately 10% higher than the index's last week closing price.
Intelligent Finance News APP learned that as the S&P 500 index broke one record after another, following Goldman Sachs's year-end target of 5600 points, the most optimistic target among Wall Street major banks, Evercore ISI has set a new high for its forecast. The organization claims that by the end of 2024, the index will once again experience double-digit growth. The optimism driven by economic recovery, improved corporate profits, and the end of the Federal Reserve's tightening cycle have pushed the S&P 500 index up 14% this year. The retreat of inflation and the AI boom will further boost the U.S. stocks in the future.
Emmanuel said that he raised his expectation for the S&P 500 index because of the optimism about economic recovery, improved corporate profits, and the end of the Federal Reserve's tightening cycle. The retreat of inflation and the AI boom will further boost the U.S. stocks in the future.
It is worth noting that Emmanuel's new target is higher than the highest year-end target from Wall Street major banks, which is Goldman Sachs' David Kostin, UBS's Jonathan Golub, and Bank of Montreal Capital Markets' Brian Belski, all predicted the 5600-point level. Last Friday, Kostin at Goldman Sachs just matched the most optimistic year-end target for the S&P 500 index on Wall Street, raising the year-end target for the third time, reflecting the optimistic prospects for profit growth and the U.S. economy. Among major banks on Wall Street, JPMorgan has the lowest year-end target for the S&P 500 index, at 4200 points, which means the index will fall more than 20% from last Friday's closing price.
Last Friday, Kostin at Goldman Sachs matched the most optimistic year-end target for the S&P 500 index on Wall Street, raising the year-end target for the third time, reflecting the optimistic prospects for profit growth and the U.S. economy. Among major banks on Wall Street, JPMorgan has the lowest year-end target for the S&P 500 index, at 4200 points, which means the index will fall more than 20% from last Friday's closing price.
Emmanuel wrote to his clients on Sunday, saying that the pandemic has changed everything, and record-stimulus, high cash balance, and low leverage provide support for consumers, followed by AI. Now, the potential of GenAI is changing everything in every job and industry. Slowdown in inflation, the Fed's intention to cut interest rates, and economic growth backgrounds support the "golden-haired girl" economy."
Emmanuel also raised its earnings per share expectations for the index in 2024 and 2025 to $238 and $251, respectively. He said the new point levels mean profit will grow by 8% and 5%, respectively.
Emmanuel said that if the S&P 500 index jumps to 6000 points at the end of December, the earnings per share will reach $238, which will push the index's PE ratio to 25 times. Although the PE ratio will inevitably rise from the historical standards, it will still be lower than the peak of the Internet bubble's 28 times level. In addition, he also believed that the S&P 500 index may reach 7000 points by the end of 2025.
Emmanuel said that although the AI's prosperity has pushed valuations to "the top 10% level since 1960", the PE ratio of the S&P 500 index may remain at a high level for "a long time".