Goldman Sachs eyes 4.32% upside for S&P 500, raises year-end target to 6,000; US recession odds eased to 15%

Investment giant Goldman Sachs raised its target for the benchmark S&P 500 as it opens a new tab index for the year-end and the next 12 months on expectations of higher growth margins for companies and a steady macroeconomic outlook through 2025, reported the news agency Reuters on Monday, October 7.

The Wall Street investment giant raised its target for the index 300 points for the next 12 months to 6,300 from 6,000 and also lifted its 2024 year-end target to 6,000 from its 5,600 levels, as per the agency report.

Goldman eyes a 4.32 per cent upside for the stock, at year-end from the index's last close of 5,751.07 points on Friday, as per the report.

Goldman Sachs is also bullish on the earnings per share(EPS) growth of corporate America, lifting its 2025 EPS estimates to $268 from $256, showing an 11 per cent rise on an annual basis. The investment firm maintained its 2024 EPS forecast at $241. 

“Our forward EPS estimates reflect a steady macro outlook...(and) the primary driver of the upward revision to our 2025 EPS estimate is greater margin expansion,” said David Kostin, an analyst at Goldman Sachs, in a note dated Friday, reported the agency. 

US Economy

The August data of the United States economy grew faster than the expected amount in the second quarter amid strong support from consumer spending. Corporate profits rebounded which is likely to help sustain expansion, as per the agency report.

“Macro backdrop remains conducive to modest margin expansion,” said Kostin, quoted by the agency.

Boost from the technology sector and recovery in the semiconductor industry cycle will further support the company's EPS growth, said Goldman, as per the report.

The S&P 500 index is up nearly 20 per cent year-to-date and stands near record highs. Goldman Sachs also eased its odds of a U.S. economic recession to 15 per cent from 20 per cent.