Goldman's S&P 500 Forecast

The S&P 500 is unlikely to gain much between now and the end of the year, according to Goldman Sachs Group strategist David Kostin. Kostin, Goldman Sachs’ chief U.S. equity strategist, reiterated in an interview with Bloomberg TV on Tuesday that his target price for the S&P 500 is 5,200 points and that he “sees a roughly flat return between now and the end of the year.” Kostin’s forecast is just below the 5,246 points the S&P 500 reached at the close on Tuesday, after rising 10% since January. Kostin said the bank’s model, which takes into account the economy, balance sheets, valuations and cash flows, shows there’s no room for much further gains. Goldman economists forecast U.S. economic growth of around 3% this year, while the bank’s equity strategists expect corporate profitability to grow by 8% in 2024. Corporate valuations are already at historic highs, according to the strategists. Kostin said that further growth is possible in all of these categories, but he sees this probability as low. Kostin noted that the risk to his forecast is that interest rates will be cut faster than market expectations, but that this is not their base case. “Our base case is that the market will trade at this multiple or even lower towards the end of the year,” Kostin said.