Citi U.S. Equity Strategist Raises S&P 500 Price Targets
Citi U.S. equity strategist Scott Chronert has increased his year-end 2023 price target for the S&P 500 to 4,600. He also raised his mid-2024 target to 5,000. Previously, Chronert had predicted the index to reach 4,000 by the end of 2023 and 4,400 by the middle of next year. In a report released on Friday, Chronert stated, “The near-term hurdles we anticipated into Q3 are now behind us.” He further explained that the new targets reflect a higher likelihood of a soft landing according to their scenario approach. Chronert also highlighted the expectation of stronger earnings growth in 2024. The revised targets indicate a mere 0.4% potential increase in the S&P 500 from its closing level on Friday until the end of this year, with an anticipated gain of over 9% from the current level to the middle of 2024. For an analysis of Wall Street’s stance on the S&P 500’s 2023 outlook, click here. Does this suggest that valuations are currently stretched? According to Chronert, “Yes, and no.” He believes that valuations for growth-oriented companies may be high but are supported by fundamental drivers, while cyclicals are trading below their long-term averages and defensives are in line with historical levels. Additionally, Chronert mentioned that the prospects of a “new growth era” are influenced by opportunities in artificial intelligence, reduced cyclicality, and strong free cash flow generation. He concluded by stating, “The good news is that we are now considering the possibility of this new growth era.” HaberTusba’s Michael Bloom contributed to this report.
