2023 was a fantastic year for the stock market, led by strong earnings, weakening inflation, and the nearing interest rate cuts. With 2024 just a few days away, investors have turned their interest toward 2024 price predictions for the stock market.
In 2023, Fundstrat’s Tom Lee predicted the S&P 500 would reach $4,750. This turned out to be the most accurate among all Wall Street analysts. For 2024, he believes the index will close at $5,200, marking an increase of about 9% from current prices.
According to Lee, the easing of financial conditions, such as interest rate cuts, will correlate with the returns of 2024. Additionally, he forecasts 11% earnings growth for S&P 500 companies to $240 next year, with another 8% increase to $260 in 2025. Lee’s 2024 price prediction is based on a 20x 2025 earnings multiple.
“Corporate capex fell past few years, but easing financial conditions mean capex recovers,” said Lee.
4 Analysts Chime in on 2024 Price Predictions
On the other end of the equation is JPMorgan with its 2024 price target of $4,200, implying downside of about 12% from current levels. The investment bank’s bearish thesis is based on a weakening consumer, geopolitical and recession risks, and the possibility of a recession.
“Equities are now richly valued with volatility near the historical low, while geopolitical and political risks remain elevated. We expect lackluster global earnings growth with downside for equities from current levels,” said JPMorgan.
Morgan Stanley sits between Fundstrat and JPMorgan, with a 2024 price target of $4,500. Morgan Stanley believes that the returns of the “Magnificent Seven” will continue early into the year before eventually faltering. The investment bank believes the S&P 500’s earnings will grow by 7% next year and recommends defensive growth stocks while avoiding tech stocks with high valuations.
Still, the majority of price predictions seem to be bullish, with the average target hovering near $5,100. Yardeni Research commands the highest price target of $5,400. The research firm attributes its target to a strong consumer, stabilizing interest rates and strength in the housing market.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
