Deutsche Bank has raised its year-end target for the S&P 500 Index from 5,500 points to 5,750 points, citing increased share buybacks and strong corporate profits, as well as strong inflows of funds driven by strong risk appetite. According to Deutsche Bank analysts, the recent volatility and pullback in the US stock market are now basically over, and US stocks will continue to rise in the future.
On Thursday, Deutsche Bank raised its year-end target for the S&P 500 index from 5500 points to 5750 points, citing increased share buybacks, strong corporate earnings, and strong inflows of funds driven by strong risk appetite.
Since August, the US stock market has experienced significant volatility. However, according to Deutsche Bank analysts, this recent period of volatility and pullback is now basically over, and US stocks will continue to rise in the future.
Deutsche Bank raises target price for US stocks again.
On Thursday, the S&P 500 index closed at 5,595.76, and Deutsche Bank's target price implies a further increase of 2.75% from Thursday's closing price before the end of the year.
Deutsche Bank strategist wrote in a report: "We believe that the profit growth of S&P 500 companies will continue to grow strongly at a low double-digit rate, which is in line with the typical growth rate during non-recession periods."
Recently, there has been strong market expectations for interest rate cuts by the Federal Reserve, and the hype surrounding artificial intelligence continues to boost the rise of US stocks. Many Wall Street institutions have raised their annual targets for the S&P 500 Index, with some even expecting the index to reach a high of 6,000 points by the end of 2024.
This is not Deutsche Bank's first upward revision this year. In May of this year, Deutsche Bank raised its year-end target for the S&P 500 index to 5,500 points, hoping for strong corporate earnings to support stock valuations.
The correction in the U.S. stock market has already ended.
Since August, there has been a correction in the U.S. stock market due to concerns about a weakening U.S. job market and a cooling of the technology stock boom. However, Deutsche Bank believes that this correction trend seems to have "ended" for now.
They also added that concerns about a slowdown in the U.S. job market have eased as the August non-farm payroll growth data in the United States stabilized.
Strategists led by Binky Chadha, Chief U.S. and Global Equity Strategist at Deutsche Bank, said that factors that will boost the market include capital inflows, capital expenditure recovery in industries other than technology, overall manufacturing recovery, and a rise in consumer confidence.
Deutsche Bank expects that as the size of stock buybacks by U.S. companies remains in line with profit growth, the size of stock buybacks will increase from the current $1 trillion to about $1.2 trillion next year.
Over the past four months, inflows into U.S. stocks have been strong and unaffected by typical seasonal factors, "which has raised expectations for corporate earnings and stock returns".
Deutsche Bank also reiterated its earnings per share (EPS) forecasts for S&P 500 index constituent companies, with EPS forecast to be $258 in 2024 and $285 in 2025.
Editor/ping