Oppenheimer sees S&P 500 ending 2024 at 5200

Oppenheimer Asset Management predicts that strong earnings growth and a resilient economy will drive the to a record high of 5,200 by the end of 2024, representing approximately 13% upside from the current level.

“Markets don’t move up in a straight line and setbacks are always likely, but those with patience and perseverance should see gains over the intermediate and long term,” analysts at Oppenheimer wrote in the 2024 outlook.

The analysts forecast a 9% earnings growth, reaching an EPS of $240, and assume a P/E multiple of 21.7x.

“With just two firms left to report Q3 results among the S&P 500, results have been stronger than expected with earnings growth of 4.5% from a year earlier on revenue gains of 1.9%. Before the season began, bottoms-up estimates called for earnings to decline by 0.5% from a year earlier,” the analysts said in a note.

Oppenheimer has one of the highest 2024 S&P 500 targets among strategists.

They see 2024 as a transitional year for the Fed, shifting from restrictive monetary policy to a more accommodative stance, with a preference for cyclical sectors and continued gains in technology, communications services, and consumer discretionary sectors.

“We believe the Fed wants to avoid pushing the economy into a recession,” the analysts added.

“Our expectations are for the Fed to wait to cut its benchmark rate until at least the second half of next year and perhaps as late as the fourth quarter should inflation prove stickier.”