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The
upgraded target reflects an upside of about 5.6% to the index's
last close of 5,304.72. It had earlier forecast a target of
5,400.
WHY IT'S IMPORTANT
The S&P 500 is up 11.2% so far this year and is at near-record
levels, driven by bets of falling borrowing costs this year and
increased optimism surrounding AI.
Stronger earnings forecasts and a "supportive" economic
backdrop, with fading risks of recession, will propel U.S.
equities, UBS said.
For 2024, UBS strategists, led by Jonathan Golub, raised their
earnings-per-share (EPS) forecast to $245 from $240, implying an
11.4% growth through the year.
CONTEXT
UBS boosted its forecast to 5,400 in February from 5,150, saying
that higher U.S. 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, while BMO Capital Markets predicted a
5,600-finish earlier this month.
(Reporting by Roshan Abraham in Bengaluru; Editing by Janane
Venkatraman)
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