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Oppenheimer Asset Management analysts have increased their year-end S&P 500 price target to 4900, up by 500.
In 2023, Oppenheimer, known as one of the prominent stock bulls on the Street, has become even more optimistic about the prospects of equities.
In a recent client note, analysts highlighted that the significant and consistent gains in the stock market since October last year have resulted in a nearly unanimous capitulation by stock market bears. This shift in sentiment suggests that the funds that were previously held on the sidelines may now start flowing into stocks in the months ahead.
“The fact that the rally is spreading across various S&P 500 sectors indicates that the bull market, which began in October 2022, has the potential to continue its upward trajectory into 2024.”
The revised price target indicates a potential upside of almost 7% for the S&P 500 compared to Monday’s closing price of 4588.96. This target is derived from an S&P 500 EPS estimate of $220 per share (down from the previous $230) and a P/E multiple of 22.2x.
“Our price target assumes that the resilience exhibited by the US economy will continue along with a high level of sensitivity by the Federal Reserve in raising its benchmark rates further to slow the inflation rate toward its 2% target.”
The recent economic data releases showed “both economic resilience as well as some vulnerabilities for the economy as the Fed continues its rate hike cycle,” the analysts concluded.
Oppenheimer’s new price target comes just a day after Citigroup lifted its own year-end 2023 objective on the S&P 500 to 4600.
S&P 500 is up 19.5% year-to-date.
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