Deutsche Bank sets highest S&P 500 year-end target at 5,500

Deutsche Bank has increased its year-end S&P 500 target for 2024 to 5,500, the highest among major brokerages, up from a previous forecast of 5,100, Reuters reported on Monday.

This new target is approximately 4 per cent higher than the index’s last close of 5,303.27. The bank’s strategists, led by Binky Chadha, believe the earnings cycle has “plenty of legs” and expect market confidence in a continued recovery to rise by year-end.

Meanwhile, Morgan Stanley’s Michael Wilson predicts the index will reach 5,400 by June 2025, up from an earlier forecast of 4,500 for December this year. Wilson anticipates improved earnings growth over the next two years, driven by “healthy, mid-single-digit top-line growth” and margin expansion.

Deutsche Bank strategists have also increased their earnings per share (EPS) forecast for S&P 500 companies from $250 to $258, with a potential rise to $271 in 2024 if economic growth remains above trend.

The S&P 500 reached record-high levels in the past week due to a lower-than-expected rise in a key inflation metric, while the Dow Jones closed above the 40,000 mark for the first time on Friday.

In February, Deutsche Bank revised its predictions for the US economy, stating it no longer expects a recession this year.