Emanuel's new estimate surpasses the 5,600 level predicted by Goldman Sachs, UBS Group, and BMO Capital Markets. He also raised his estimate for the index's per-share earnings in 2024 and 2025 to $238 and $251, respectively, implying 8% and 5% profit growth. Emanuel sees a possibility of the S&P 500 reaching 7,000 by the end of 2025. Despite AI exuberance pushing valuations to high levels, he believes the S&P 500's price-earnings multiples may remain elevated for extended periods.
Key takeaways:
- Evercore ISI's chief equity and quantitative strategist, Julian Emanuel, has raised his year-end forecast on the S&P 500 Index to 6,000, which is the highest among major equity strategists tracked by Bloomberg and approximately 10% above the gauge’s closing level on Friday.
- Emanuel's optimism is based on a resilient economy, improving corporate earnings, the end of the Federal Reserve’s tightening cycle, ebbing inflation, and the influence of artificial intelligence.
- Emanuel also raised his estimate for the index’s per-share earnings in 2024 and 2025 to $238 and $251, respectively, implying an 8% and 5% profit growth.
- Despite the high valuations driven by AI exuberance, Emanuel believes the S&P 500’s price-earnings multiples may remain elevated for extended periods and sees a possibility of the index reaching 7,000 by the end of 2025.