Goldman Sachs: Expects the S&P 500 Index to rise 11% in the next 12 months

ChainCatcher news, Goldman Sachs has once again raised its target for the S&P 500 index in less than two months. In a report led by strategist David Kostin, Goldman Sachs wrote: "The Federal Reserve is implementing easing policies earlier and more deeply than expected, bond yields are lower than our previous expectations, the fundamentals of large stocks remain strong, and investors are willing to overlook potential short-term earnings weakness, all support our upward revision of the S&P 500 index's forward price-to-earnings ratio expectation from 20.4 times to 22 times. The expected returns for the S&P 500 index over 3 months, 6 months, and 12 months have been raised to +3%, +6%, and +11%, respectively, with new target levels of 6,400 points, 6,600 points, and 6,900 points, compared to previous forecasts of 5,900 points, 6,100 points, and 6,500 points."

The strategists maintain their forecast of a 7% growth in earnings per share for the S&P 500 index in 2025 and 2026, but believe that this forecast faces two-way risks. The key downside factor for the earnings per share forecast is the final level of tariffs and their impact on corporate profits. While a narrowing breadth often signals a risk of declines greater than average, the bank's analysts believe that 'chasing gains' is more likely than 'chasing losses' and expect the market's upward momentum to expand in the coming months, favoring an overweight in software and services, materials, utilities, media and entertainment, and real estate.