Stocks down on the day but brokerages more bullish for 2024

STOCKS DOWN ON THE DAY BUT BROKERAGES MORE BULLISH FOR 2024

The Nasdaq composite IXIC and S&P 500 SPX were lower on Monday, but at least two big brokerages were out with more bullish views for the S&P 500 for 2024.

Goldman Sachs (GS) raised its year-end S&P 500 index SPX target to 5,200 from 5,100. The new target is about 4.5% above current levels and GS chief U.S. equity strategist David Kostin attributed the target bump to increased profit estimates.

"Our upgraded 2024 EPS forecast of $241 (8% growth) stands above the median top-down strategist forecast of $235 (6% growth) and reflects our expectation for stronger economic growth and higher profits for the Information Technology and Communication Services sectors, which contain 5 of the “Magnificent 7” stocks," wrote Kostin in his weekly Kickstart note.

He added that GS expects P/E valuation multiples for the equal-weight S&P 500 (.SPXEW) (at 16x) and aggregate cap-weight index (at 20x) will remain close to current levels, making earnings growth the primary driver of this year's remaining upside.

Separately, UBS made a more aggressive adjustment, raising its year-end S&P 500 target to 5,400 from 5,150, which is about 8.5% above current levels.

(Terence Gabriel)

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