Analysts at Oppenheimer Asset Management, hiked the year-end S&P 500 price target by 500 to 4900.
Oppenheimer, which has been regarded as one of the bigger stock bulls on the Street in 2023, is now even more bullish on the outlook for equities.
“Capitulation by stock market bears on a near wholesale basis of late (on sizable and persistent gains since October last year) suggests that money held on the sidelines may flow into stocks in the months ahead,” the analysts wrote in a client note today.
“A broadening of the rally across S&P 500 sectors suggests that the bull market that emerged from the October 2022 lows has legs to run higher into 2024.”
The new price target implies a nearly 7% upside potential for the S&P 500, relative to Monday’s closing price of 4588.96. It is based on the S&P 500 EPS estimate of $220 per share, down from the prior $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.