Home Stock SPX price prediction: Goldman Sachs’ Kostin sees a 10% upside

SPX price prediction: Goldman Sachs’ Kostin sees a 10% upside

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The benchmark S&P 500 index is up 20% this year, but Goldman Sachs’ David Kostin says the next fifteen months won’t be nearly as exciting for the investors.

Kostin forecasts SPX to close 2022 at 4,900 that represents a roughly 10% upside from here.

Kostin defends his thesis on CNBC’s “Squawk on the Street”

Interestingly, Kostin expects a further upside to 4,700 by year-end, and then a modest 200 points increase only in 2022. Defending his thesis on CNBC’s “Squawk on the Street”, he said:

We’re assuming only 2.0% earnings growth next year. A lot of this muted level of earnings growth is a function of tax reforms. If we didn’t have tax reforms, we would’ve expected around 7.0% of earnings growth. So, tax reforms make up for about a 5.0% headwind in earnings growth.

The benchmark is currently trading at about 21 times forward multiple with bond yield at 1.50%. Kostin expects it to climb slightly to 1.60% by the end of the year that supports his view of 4,700 for SPX by year-end.

Lebenthal says the long-term outlook continues to be positive

Also on Thursday, Cerity Partners’ Jim Lebenthal reiterated that the long-term outlook for the U.S. stock market continues to be positive as there are more tailwinds than headwinds. On CNBC’s “Halftime Report”, he said:

The market has priced in the supply chain bottlenecks, inflation, and the congressional dysfunction. I think the Fed will continue to buy bonds and pour cash for another nine months at least. The delta has peaked too. I’m a long-term investor, and I love what I’m seeing from the cyclicals right now.

Last week, Zor Capital’s Joseph Fahmy also said the Fed will continue to provide an equity friendly environment.

The post SPX price prediction: Goldman Sachs’ Kostin sees a 10% upside appeared first on Invezz.

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