Deutsche Bank expects S&P 500 to end 2024 at 5100, new Street high

  • Stock Market News
Deutsche Bank expects S&P 500 to end 2024 at 5100, new Street high
Credit: © Reuters.

Deutsche Bank strategists anticipate that the S&P 500 will surge to a record 5,100 by the end of the next year.

Analysts at the European banking giant say stock valuations are not excessively high, with fair value estimated at 18x and a range of 16x-20x.

Despite solid earnings growth, market perceptions remain subdued, which leaves enough room for valuations to re-rate higher. While Deutsche sees a “mild short” recession next year, it still expects earnings for companies in the S&P 500 to rise 10%.

"If earnings growth continues to recover as we forecast, valuations will remain well supported around the top of the range as is typical on the pricing in of a pickup in earnings growth," the analysts said.

The analysts note that the market appears to be following a historical pattern of sharp, short-lived selloffs followed by rapid recoveries. They predict that stocks may experience a modest, brief selloff in the event of a slowdown or recession.

Moreover, they highlight the historical tendency for equities to rally after U.S. presidential elections, irrespective of the winning party. The analysts identify the tight labor market as a significant upside risk, historically preceding periods of rapid productivity growth.

According to Reuters, the median 2024-end forecast for the S&P 500 is 4700. Recently, analysts at RBC Capital Markets and Bank of America said they expect the U.S. benchmark index to end the next year at 5000.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or