Wall Street faces challenges in predicting equities as AI rally accelerates, with S&P 500 Index advancing 15%, making it difficult for analysts. Goldman Sachs’ David Kostin predicts stock gains, while Morgan Stanley’s Wilson and JPMorgan Chase’s Kolanovic warn investors. Bank of America’s Savita Subramanian optimistically predicts a renewed downswing. Some strategists are currently expecting the benchmark to end 2023 just below 4,100. According to Citigroup Inc. strategists at the bank, the S&P 500 Index could tumble to 4,000 by year-end and have initiated a new target of 4,400 by mid-2024.
FactSet’s most current target price projection for the S&P 500 index is 4823.78, representing a 9.3% increase over the next 12 months.
Since March 31, the price of the S&P 500 has increased by 7.4% (to 4411.59 from 4109.31). According to FactSet, the industry analysts in aggregate predict the S&P 500 will see a price increase of 9.3% over the next 12 months. This percentage is based on the difference between the bottom-up target price and the closing price for the index as of July 6. On July 6, the bottom-up target price for the S&P 500 was 4823.78, which was 9.3% above the closing price of 4411.59.
The bottom-up target price is calculated by aggregating the median target price estimates (based on company-level estimates submitted by industry analysts) for all the companies in the index.
At the sector level, the Energy (+23.0%) and Health Care (+15.6%) sectors are expected to see the largest price increases, as these two sectors had the largest upside differences between the bottom-up target price and the closing price on July 6.
On the other hand, the Consumer Discretionary (+3.8%) and Information Technology (+4.6%) sectors are expected to see the smallest price increases, as these two sectors had the smallest upside differences between the bottom-up target price and the closing price on July 6.
At the company level, the 10 stocks in the S&P 500 with the largest upside and downside differences between their median target price and closing price (on July 6) are as below:
