Goldman Cuts S&P 500 Year-End Forecast, Expects Further Rise – Bloomberg

Goldman Sachs Group Inc. has cut its year-end target for the S&P 500 index to 3,600, down from its previous forecast of 4,300. A change in the outlook for further increases in US policy rates will weigh on US equity valuations, he said.

Goldman’s valuation model assumes a rate hike scenario of 15 times earnings, strategists led by David Kostin said in a note on Wednesday. The previous assumption was 18 times.

Goldman economists predict an increase of 0.75 percentage points in November, 0.5 percentage points in December and 0.25 percentage points in February next year. He predicted that the policy rate would peak from 4.5% to 4.75%.

Goldman Sachs raises rate hike forecasts after Powell’s hawkish stance

Risks in the latest forecast remain tilted to the downside due to the deepening recession, Goldman said. In such a scenario, corporate profits would fall and the S&P 500 would hit a bottom of 3,150.

Goldman’s base case year-end target of 3600 suggests the S&P 500 is down 4.2% from Thursday’s close. The 6 month target is 3600, the 12 month target is 4000.

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Goldman Cuts S&P 500 Target Citing Higher Fed Rate Path (1) (UK)

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