UBS Global Research has raised its year-end target for the benchmark S&P 500 index to 5,600 points, marking the highest forecast among major brokerages. The upgraded target reflects an upside of about 5.6 percent from the index’s last close of 5,304.72. Previously, UBS had forecast a target of 5,400.
The S&P 500 is up 11.2 percent so far this year and is at near-record levels, driven by bets of falling borrowing costs and increased optimism surrounding AI. Stronger earnings forecasts and a “supportive” economic backdrop, with fading risks of recession, will propel US equities, UBS noted.
Boost in Earnings Forecasts
For 2024, UBS strategists, led by Jonathan Golub, raised their earnings-per-share (EPS) forecast to $245 from $240, implying an 11.4 percent growth through the year. This adjustment underscores the firm’s confidence in the resilience of corporate America amidst evolving economic conditions.
Back in February, UBS boosted its forecast to 5,400 from 5,150, citing that higher US inflation tended to be positive for stock prices and would likely benefit corporate margins through increased pricing power. With the current rejig in forecast, UBS joins major brokerages such as Deutsche Bank and Wells Fargo, which have also predicted the index would end at 5,500 or higher in 2024.
- Deutsche Bank raised its 2024 year-end S&P 500 target to 5,500 last week, banking on strong corporate earnings supporting equity valuations.
- BMO Capital Markets predicted a 5,600-finish earlier this month.
The collective optimism among these financial giants underscores a broader market sentiment that sees robust corporate performance and a favorable economic environment as key drivers for the stock market’s continued ascent.
