- The S&P 500's record-setting rally this year has sparked a wave of price target increases from Wall Street.
- The most bullish S&P 500 price target is 6,000 from Evercore ISI, which represents a gain of about 7%.
- Key bullish drivers includes AI benefits, consumer resilience, and imminent Fed rate cuts.
The S&P 500 has soared this year, with the index jumping about 15% to record highs in the first half.
With the second half of 2024 underway, Wall Street strategists are updating their year-end price targets for the S&P 500, and nearly all of them are leaning bullish as they increase their forecasts.
While the average year-end S&P 500 price target is 5,429, according to data from Bloomberg, the median year-end price target is 5,600. The S&P 500 traded around 5,630 on Friday.
These are the updated stock market predictions of some of the most bullish strategists on Wall Street.
Evercore ISI: S&P 500 price target of 6,000
Evercore ISI strategist Julian Emanuel went from bearish to the biggest bull on Wall Street when he raised his year-end S&P 500 price target last month to 6,000 from 4,750.
Emanuel's price target represents potential upside of 7% for the S&P 500 between now and the end of the year, and would represent a full-year gain of 26%.
"AI revolution is in the early innings" and that should lead to continued strength in earnings growth, Emanuel said. Emanuel forecasts S&P 500 EPS growth of 8% and 5% in 2024 and 2025, respectively.
"The pandemic changed everything. Record stimulus, elevated household cash balances and low leverage support the consumer. Then came AI. Today, Gen AI's productivity potential in every job and sector is inflecting. The backdrop of slowing inflation, a Fed intent on cutting rates and steady growth have supported Goldilocks," Emanuel said.
And while the stock market's valuation multiple may be high, Emanuel said they're justified.
"High multiples are supported by companies' proven record of managing costs and maintaining/growing margins," Emanuel explained.
Oppenheimer: S&P 500 price target of 5,900
Oppenheimer strategist John Stoltzfus increased his year-end price target to 5,900 from 5,500 this month, driven by continued resilience in the US consumer.
"Just like before, it's a matter of the fundamentals, where they stand right now," John Stoltzfus, Oppenheimer's chief investment strategist, told CNBC. "It includes the resilience of the consumer, even as the economy slows, quite a bit of resilience there — the resilience in business, job growth, wage growth."
Importantly, the potential gains aren't being driven by short-term investors, but rather by long-term investors who have to park their money somewhere to fund their retirement, and stocks are the likely winners.
"It's driven a lot by intermediate- to longer-term investors, some of which are just the citizenry recognizes that there's real threats to Social Security stability, and people realize they need to play a role in their own retirement," Stoltzfus said.
Yardeni Research: S&P 500 price target of 5,800
Yardeni Research raised its year-end S&P 500 price target to 5,800 from 5,400 this week.
Strategist Eric Wallerstein said the combination of $6 trillion in sidelined cash and imminent interest rate cuts from the Federal Reserve should drive stock prices higher.
"We're still targeting SPX 8000 by end of decade. Our Roaring 2020s scenario is just being discounted faster than we anticipated. We don't think rate cuts are necessary, but with Q2 GDPNow at 2% and $6.15 trillion in money-market funds, rate cuts will further fuel a meltup," Wallerstein said on Thursday.
Wallerstein added that, unlike the dot-com bubble in 2000, company profits are booming right now, which should lead to sustainable stock price gains.
Additionally, Wallerstein said the stock market's rally should expand to companies other than the mega-cap tech stocks as AI benefits begin to trickle down to other companies outside of the technology sector.
Ned Davis Research: S&P 500 price target of 5,725
A strong rally in the stock market this year led to Ned Davis Research increasing its year-end S&P 500 price target to 5,725 from 4,900 last month.
The research firm said as long as earnings growth continues to accelerate, even if just slightly, it should fuel a continued rally in stock prices.
"The modest earnings acceleration is continuing, the economy and inflation appear to be moderating enough for the Federal Reserve to lower its benchmark rate, and the market tends to enjoy a year-end rally during presidential election years," NDR strategist Ed Clissold said.
Goldman Sachs: S&P 500 price target of 5,600
Goldman Sachs strategist David Kostin boosted his S&P 500 price target to 5,600 from 5,200 last month. The bank had originally expected the index to end the year at 5,100.
Though Kostin boosted his price target increases, he warned that heavy concentration in mega-cap tech companies and a likely slowdown in earnings growth during the second half of the year could lead to flat returns for the next six months.
"Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates," Kostin said.
UBS: S&P 500 price target of 5,600
UBS raised its S&P 500 price target to 5,600 from 5,400 in May, and that's after the bank raised its price target in February.
The bullishness was driven by no signs of a recession in the economy and solid GDP growth forecasts.
"Since then, consensus 2024 GDP forecasts have increased from 1.6% to 2.4%," analysts led by Jonathan Golub wrote. "At the same time, recession/tail risks have declined on a number of key metrics including economist surveys and the Chicago Fed's Financial Conditions Index."
UBS also hiked its earnings-per-share forecasts to $245 from $240 this year and raised 2025 estimates to $260 from $255.
According to data from Bloomberg, the average S&P 500 earnings per share target for 2024 is $242.