Goldman Sachs raises S&P 500 target for year-end, next 12 months By Reuters

(Reuters) – Goldman Sachs raised its benchmark target for the year-end and next 12 months on expectations of higher margin growth for corporates and a stable macroeconomic outlook through 2025.

The Wall Street brokerage on Friday raised its target for the index for the next twelve months to 6,300 from 6,000 and raised its current year-end target to 6,000 from 5,600.

Goldman’s year-end target implies a 4.32% upside from the index’s last close of 5,751.07 on Friday.

Goldman is also bullish on corporate America earnings per share (EPS) growth, raising its 2025 EPS estimate to $268 from $256, reflecting 11% year-over-year growth. The brokerage maintained its 2024 EPS forecast at $241.

“Our forward EPS estimates reflect a steady macro outlook … (and) the primary driver of the upward revision to our 2025 EPS estimate is higher margin expansion,” Goldman analysts led by David Kostin said in a note note dated Friday.

Data in August showed the US economy grew faster than initially expected in the second quarter amid strong consumer spending and corporate profits rebounded, which should help support the expansion.

“The macro fund remains conducive to modest margin expansion,” Kostin said.

A surge in mega-cap technology stocks and recovery in the semiconductor industry cycle will further support the companies’ EPS growth, the brokerage added.