The S&P 500 index has been on a tear this year, reaching new record highs and surpassing the expectations of many Wall Street analysts. As the year draws to a close, some of the top strategists have revised their year-end targets for the benchmark index, reflecting the changing market conditions and outlooks.
A strong rally amid challenges
The S&P 500 has gained about 25% year-to-date, as of December 10, 2023, outperforming the Dow Jones Industrial Average and the Nasdaq Composite. The index has been boosted by strong corporate earnings, accommodative monetary policy, fiscal stimulus, vaccine rollouts, and reopening optimism.
However, the market has also faced some headwinds, such as inflation pressures, supply chain disruptions, labor shortages, geopolitical tensions, and the emergence of new Covid-19 variants. These challenges have increased the uncertainty and volatility in the market, prompting some investors to take profits or rotate into defensive sectors.
A range of forecasts
At the start of 2023, the average Wall Street estimate for the S&P 500’s year-end target was 5,050, according to data from Bloomberg. The highest estimate was 5,600 from Morgan Stanley, while the lowest estimate was 4,200 from Wells Fargo.
As the year progressed, most strategists revised their targets upward, reflecting the better-than-expected performance of the index. However, some also lowered their targets, citing the risks and headwinds facing the market.
As of December 10, 2023, the average Wall Street estimate for the S&P 500’s year-end target was 5,250, with a high of 5,800 from Goldman Sachs and a low of 4,400 from UBS. The table below shows the latest forecasts from some of the top strategists:
| Firm | Strategist | Year-end target | Revision |
|---|---|---|---|
| Goldman Sachs | David Kostin | 5,800 | Up from 5,300 |
| Morgan Stanley | Mike Wilson | 5,700 | Up from 5,600 |
| JPMorgan Chase | Dubravko Lakos-Bujas | 5,600 | Up from 5,300 |
| Bank of America | Savita Subramanian | 5,500 | Up from 4,250 |
| Citigroup | Tobias Levkovich | 5,300 | Up from 4,600 |
| Oppenheimer | John Stoltzfus | 5,100 | Up from 4,900 |
| Credit Suisse | Jonathan Golub | 5,000 | Down from 5,100 |
| UBS | Keith Parker | 4,400 | Down from 4,500 |
A cautious optimism for 2024
Looking ahead to 2024, most strategists are cautiously optimistic about the prospects of the S&P 500. They expect the index to continue to benefit from solid earnings growth, supportive fiscal and monetary policies, and improving economic conditions. However, they also acknowledge the potential headwinds and uncertainties that could weigh on the market performance.
The average Wall Street estimate for the S&P 500’s year-end target for 2024 is 5,450, with a high of 6,000 from Goldman Sachs and a low of 4,800 from UBS. The table below shows the initial forecasts from some of the top strategists:
| Firm | Strategist | Year-end target |
|---|---|---|
| Goldman Sachs | David Kostin | 6,000 |
| Morgan Stanley | Mike Wilson | 5,800 |
| JPMorgan Chase | Dubravko Lakos-Bujas | 5,700 |
| Bank of America | Savita Subramanian | 5,600 |
| Citigroup | Tobias Levkovich | 5,400 |
| Oppenheimer | John Stoltzfus | 5,300 |
| Credit Suisse | Jonathan Golub | 5,200 |
| UBS | Keith Parker | 4,800 |
