Goldman Sachs Raises Year-End S&P 500 Target from 6,100 to 6,600

The previous day, BofA also raised its target from 5,600 to 6,100

"Favorable conditions such as rate cuts in the second half, falling bond yields, strong large-cap earnings, investor appetite, etc."

Wall Street average year-end target index: 6,300

Goldman Sachs raised its year-end S&P 500 target to 6,600 points, saying that the conditions for the U.S. stock market will be even better in the second half of the year.

According to CNBC on the 8th (local time), Goldman Sachs raised its year-end S&P 500 target index by 6% from the current level, setting it at 6,600 points. Goldman also revised its 3-month and 12-month target indexes to 6,400 and 6,900, respectively.

The company’s previous S&P 500 target was 6,100, which was set in May after U.S. President Donald Trump postponed tariff impositions.

According to a CNBC market strategist survey, Goldman Sachs’ updated outlook is among the most optimistic targets on Wall Street. The median S&P 500 target among Wall Street firms stands at 6,300 points.

David Kostin, Chief U.S. Equity Strategist at Goldman Sachs, said, considering the market environment, "the forward P/E ratio for S&P 500 companies is expected to be supported at 22 times earnings." In the previous target, the P/E ratio for S&P 500 companies was set at 20.4 times. He noted that in the second half, the U.S. equity outlook will be bolstered by "easier monetary policy that is faster and stronger than the Fed expects, lower bond yields, robust large-cap fundamentals, and investors willing to endure short-term profit weakness."

However, Kostin expects that a short-term rotation will occur as a result of the recent rally in the S&P 500. He mentioned that the latest gains have been driven by a handful of stocks. He pointed out that the median constituent is still over 10% below its 52-week high, marking the narrowest market breadth in decades.

He added, "A narrow breadth suggests greater downside risk than average, but the probability of ‘chasing up’ is higher than ‘chasing down.’ Therefore, the rally could broaden over the coming months."

Following Goldman Sachs, Bank of America also raised its 2024 S&P 500 target this week from 5,600 to 6,300. Wall Street strategists’ targets have risen compared to the beginning of the first half of this year as a result of President Donald Trump’s changes to tariff policy and the development of geopolitical tensions.

Jung-A Kim, contributing reporter kja@hankyung.com