Goldman Sachs (GS) has raised its targets for the benchmark S&P 500 Index (^GSPC) for the year-end and next 12 months on the back of improved corporate profitability and a stable macroeconomic outlook through 2025. .
The Wall Street brokerage on Friday raised its index target for the next 12 months to 6,300 from 6,000, and also raised its current year-end target to 6,000 from 5,600.
Goldman’s year-end target suggests a 4.32% increase from the index’s final close of 5,751.07 on Friday.
Goldman is also bullish on U.S. companies’ earnings per share (EPS) growth, raising its 2025 EPS forecast from $256 to $268, reflecting an 11% increase on an annual basis. . The company maintained its 2024 EPS forecast at $241.
“Our forward EPS estimates reflect a stable macro outlook… (and) the main reason for the upward revision to our 2025 EPS estimates is The key factor is expanding profit margins.”
According to August data, the U.S. economy grew faster than initially expected in the second quarter on the back of strong consumer spending, and corporate profits are also recovering, which is expected to contribute to sustaining economic expansion.
“The macro environment remains conducive to modest profit growth,” Kostin said.
The brokerage added that a boost from large-cap technology stocks and a recovery in the semiconductor industry cycle will further support companies’ EPS growth.
(Reporting by Gokul Pisharody in Bengaluru; Editing by Abhinaya Vijayaraghavan)