Goldman Sachs Raises Year-End S&P 500 Index Target, Outlook for Next 12 Months by Reuters

Goldman Sachs has increased its year-end target for the benchmark index and its projection for the next 12 months, anticipating higher margin growth for corporate entities and a stable macroeconomic outlook extending through 2025.

On Friday, the Wall Street investment firm raised its 12-month index target to 6,300 from 6,000 and adjusted its current year-end target to 6,000 from 5,600. This new target suggests a potential upside of 4.32% based on the index’s recent closing figure of 5,751.07.

Goldman Sachs holds an optimistic view regarding earnings per share (EPS) growth for corporate America, increasing its 2025 EPS estimate to $268 from $256, which represents an 11% year-over-year rise. The firm’s EPS forecast for 2024 remains unchanged at $241.

David Kostin and other analysts from Goldman stated in a note that their EPS estimates reflect a consistent macroeconomic outlook. They noted that greater margin expansion is the primary reason for the upward revision in their 2025 EPS estimate.

Recent data from August indicated that the U.S. economy experienced faster growth than initially anticipated in the second quarter, buoyed by robust consumer spending, while corporate profits have also seen a rebound, aiding the ongoing expansion.

Kostin commented that the current macroeconomic environment is favorable for modest margin expansion. Furthermore, the resurgence of mega-cap technology stocks and recovery in the semiconductor industry are expected to further bolster the EPS growth of companies.