Goldman lifts S&P 500 target; profit optimism to drive rally

Just months after setting a 2024 target for the S&P 500 Index, Goldman Sachs Group strategists have boosted their forecast for a second time, reflecting Wall Street's optimistic outlook for earnings.

"Increased profit estimates are the driver of the revision," a team led by David Kostin wrote in a note to clients dated Friday. The 12-month forward earnings expectations are at a record high for the US stock index after forecasts bottomed out a year ago. Kostin now sees the S&P 500 gaining to 5,200 by the end of this year, implying a 3.9% rise from Friday's close, raising his forecast from the 5,100 level he predicted in mid-December.

Goldman's 5,200 price target for the S&P 500 in 2024 is now among the highest on Wall Street, joining the ranks of bulls including Tom Lee of Fundstrat Global Advisors and Oppenheimer Asset Management chief strategist John Stoltzfus, who both hold a similar year-end outlook.