Goldman Sachs is boosting its year-end target on the S&P 500 to 4,500, citing a broadening rally that goes beyond the largest tech names.
The new target represents about 5% upside from current levels on the broad-market index and is an increase from Goldman’s previous target of 4,000.
The firm is holding steady on its 2023 earnings-per-share forecast for the index, keeping it at $224, chief U.S. equity strategist David Kostin wrote in a note late Friday. That EPS prediction assumes a soft landing and is higher than the top-down consensus of $206, he wrote.
“The P/E multiple of 19x is greater than we expected, led by a few mega cap stocks,” Kostin added. “But prior episodes of sharply narrowing breadth have been followed by a ‘catch-up’ from a broader valuation re-rating.”
The S&P 500 is up nearly 12% this year. Though the index notched a modest 0.1% gain Friday, it briefly breached the 4,300 threshold during the session — a level it hasn’t touched since August.
Though a handful of Big Tech stocks — namely Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla — are some of the highest fliers in the S&P 500 this year, other sectors are perking up. The Utilities Select Sector SPDR Fund (XLU), for instance, is up roughly 2% this week.