S&P 500 predictions: Where will it be at the end of 2024?

The stock market’s performance has surprised a lot of people this year, and as a result, making S&P 500 predictions is difficult. So far, in 2024, the S&P 500 gained 13.9% year to date (YTD). Recently, it hit an all-time high, trading at around 5,440 as of Monday.

The Nasdaq Composite has done even better, rising 17.8% YTD as the bull market that began some 18 months ago continues to run.

With 2024 approaching the halfway point, market analysts are reviewing and updating their predictions for the year. For example, Goldman Sachs posted its updated projection for where the S&P 500 will be at the end of the year, which should please investors.

S&P 500 at 5,600

In a research note on Monday, Goldman Sachs analysts said they had raised their prediction for the S&P 500 at the year’s end to 5,600. From its current level at around 5,440, the S&P 500 would have to rise another 2.9% to finish the year at 5,600.

It would result in the S&P 500 finishing the year up 17.4% after returning 24% in 2023.

Goldman Sachs analysts said the gains from here on out will be continue to be driven by the earnings power of mega-cap tech giants, including Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META), NVIDIA (NASDAQ: NVDA), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN), reported Reuters.

“The drivers of the rally include upward revisions to consensus 2024 earnings estimates for these same tech companies and valuation expansion stemming from increased investor enthusiasm about artificial intelligence (AI),” Goldman analysts said, according to Reuters.

Along with the muted growth, Goldman analysts also said they expect the price-to-earnings ratio for the S&P 500 at the end of the year to be down to roughly 20.4. It is currently at 23.

One wildcard for 2024 is the presidential elections set for November. The markets could see increased volatility leading up to the election, but Goldman expects the S&P 500 to rebound even higher after the election.

The third upward revision by Goldman Sachs

Initially, analysts at Goldman Sachs had a more bearish view of the markets in 2024. In November 2023, they had predicted that the S&P 500 would be at 4,700 at the end of 2024. However, the benchmark had already exceeded that by January.

In December, Goldman upped its forecast to 5,100, and the S&P blew past that in March. In February, the firm again upped its prediction for the S&P 500, this time to 5,200.

Goldman Sachs’ modeling called for several different paths, ranging from a high of 6,300 to a low of 4,700, but 5,600 was given as the most-likely scenario.

Evercore makes S&P 500 predictions at 6,000

Goldman Sachs’ outlook is not the most bullish one out there, as Evercore raised its target for the S&P 500 to 6,000 over the weekend. That would be another 10.3% from the current level and would result in a 25.8% increase for the large-cap benchmark in 2024.

Evercore raised its estimate for earnings-per-share growth for the S&P 500 to 8% in 2024, which could push the S&P 500 P/E ratio up to 25. This would be higher than average and above the current P/E ratio of 23.

Evercore also expects another 1,000-point gain for the S&P 500 in 2025, targeting 7,000 by the end of the year.

“The pandemic changed everything,” Evercore analysts wrote in a research note, according to Bloomberg. “Record stimulus, elevated cash balances and low leverage support the consumer. Then came AI. Today, GenAI’s potential in every job and sector is inflecting. The backdrop of slowing inflation, a Fed intent on cutting rates and growth support Goldilocks.”

These are not the only two bullish views, as both UBS Group and BMO Capital Markets also raised their targets recently to 5,600.

Investors should note these changes but also realize that the markets are hard to predict, as most analysts have been wrong about the market so far and could be wrong again. That makes it imperative to do your own research on individual stocks.