S&P 500 Could Reach 6,300 In 12 Months, Says Goldman Sachs, Driven by 'Strong AI Demand' And 'Margin Expansion'

S&P 500 Could Reach 6,300 In 12 Months, Says Goldman Sachs, Driven by 'Strong AI Demand' And 'Margin Expansion'

Benzinga
October 7, 2024

Goldman Sachs upgraded its 12-month price target for the S&P 500 index from 5,600 to 6,300, driven by stronger-than-expected corporate earnings heading into the third quarter and robust demand for artificial intelligence technologies.

The revision, outlined in a report led by U.S. equity strategist David Kostin, reflects optimism around earnings-per-share (EPS) growth and margin expansion, particularly in key sectors like technology and healthcare.

The S&P 500, which tracks the largest 500 U.S. corporations through the SPDR S&P 500 ETF Trust (NYSE:SPY), is currently trading less than 1% below its all-time high.

S&P 500 Earnings Forecasts Upwardly Revised

Goldman Sachs now projects the S&P 500’s earnings per share to rise to $268 in 2025, representing an 11% year-over-year increase.

“The primary driver of the upward revision to our 2025 EPS estimate is greater margin expansion,” analysts wrote.

This is up from the bank’s previous estimate of $256, which forecasted just 6% growth. For 2026, the investment bank forecasts further EPS growth to $288, or 7%, continuing a healthy upward trajectory.

For the current year, Goldman Sachs maintains its full-year EPS forecast of $241 for the S&P 500, reflecting an 8% year-over-year growth, consistent with prior guidance.

Year

Goldman Sachs’ S&P 500 EPS Forecast

Growth Rate

2024

$241

+8%

2025

$268

+11%

2026

$288

+7%

Goldman Sachs' earnings forecasts are supported by steady macroeconomic growth expectations.

The firm's economists predict that U.S. GDP will grow by 2.3% in 2025, followed by ...

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