Bank of America Corp.'s Savita Subramanian is the latest equity strategist to ratchet up her target for the S&P 500 Index to among the highest on Wall Street after this year's rally left forecasters blindsided.
Subramanian now expects the benchmark to end the year at 5,400, compared with her earlier target of 5,000 — implying a gain of about 5% from Friday's close. Indicators are flashing bullish signals on stronger earnings growth ahead and "surprising" profit margin resilience, she said.
"Bull markets end with euphoria — we're not there yet," Subramanian, the bank's head of US equity and quantitative strategy, wrote in a note to clients on Sunday. "Sentiment has improved, but areas of euphoria are limited."
BofA's 5,400 price target for the S&P 500 in 2024 now ranks as one of the most bullish on Wall Street, according to about two dozen sell-side strategists tracked by Bloomberg.
She joins the ranks of Ed Yardeni of Yardeni Research and Jonathan Golub of UBS Group AG, who both hold the same year-end outlook.
The artificial-intelligence frenzy has surprised Wall Street forecasters and spurred a race among strategists to keep up with a stock market rally that's already blowing past their expectations. In recent weeks, Piper Sandler & Co., UBS and Barclays Plc have all boosted their targets.
Goldman Sachs Group Inc. and UBS have both already raised their outlooks twice since December, following the Federal Reserve's dovish policy shift.
The S&P 500 closed above the significant 5,100 milestone on Friday for the first time in history, with the index already beating the average year-end forecast of 4,899.40.
What's Driving the Index
Leading indicators argue for upside to BofA's earnings-per-share forecast of $235, with the consensus's $243 seeming like a "reasonable" expectation for stronger economic growth and higher profits, the firm's strategists said.
