On July 7, the S&P 500 closed at a record-high value of 4358.13. On July 8, the value of the index fell about 1% to 4320.82. Where do industry analysts believe the price of the index will go from here?
Industry analysts in aggregate predict the S&P 500 will see a price increase of 11.2% over the next 12 months. This percentage is based on the difference between the bottom-up target price and the closing price for the index as of July 8. The bottom-up target price is calculated by aggregating the median target price estimates (based on company-level estimates submitted by industry analysts) for all companies in the index. On July 8, the bottom-up target price for the S&P 500 was 4803.62, which was 11.2% above the closing price of 4320.82.
At the sector level, the Energy (+17.1%) and Materials (+15.9%) sectors are expected to see the largest price increases, as these two sectors had the largest upside differences between the bottom-up target price and the closing price on July 8. On the other hand, the Real Estate (+4.2%) sector is expected to see the smallest price increase, as this sector had the smallest upside difference between the bottom-up target price and the closing price on July 8.
At the company level, the 10 stocks in the S&P 500 with the largest upside and downside differences between their median target price and closing price (on July 8) can be found in the tables below.
|
Company |
Target |
Closing |
Diff ($) |
Diff (%) |
|
Penn National Gaming, Inc. |
110.00 |
71.97 |
38.03 |
52.8% |
|
Micron Technology, Inc. |
115.00 |
77.11 |
37.89 |
49.1% |
|
Discovery, Inc. Class C |
40.00 |
27.23 |
12.77 |
46.9% |
|
Alaska Air Group, Inc. |
83.00 |
57.78 |
25.22 |
43.6% |
|
Discovery, Inc. Class A |
41.00 |
28.78 |
12.22 |
42.5% |
|
Under Armour, Inc. Class C |
25.00 |
18.08 |
6.92 |
38.3% |
|
Las Vegas Sands Corp. |
69.00 |
50.25 |
18.75 |
37.3% |
|
Southwest Airlines Co. |
70.00 |
51.19 |
18.81 |
36.7% |
|
Tapestry, Inc. |
54.50 |
40.38 |
14.12 |
35.0% |
|
APA Corp. |
27.00 |
20.03 |
6.97 |
34.8% |
|
Company |
Target |
Closing |
Diff ($) |
Diff (%) |
|
Waters Corporation |
300.00 |
365.68 |
-65.68 |
-18.0% |
|
Lumen Technologies, Inc. |
11.00 |
13.T19 |
-2.19 |
-16.6% |
|
Expeditors Intl. of Washington, Inc. |
110.00 |
126.88 |
-16.88 |
-13.3% |
|
Illumina, Inc. |
417.50 |
472.86 |
-55.36 |
-11.7% |
|
Fortinet, Inc. |
226.00 |
252.93 |
-26.93 |
-10.6% |
|
IDEXX Laboratories, Inc. |
592.50 |
659.94 |
-67.44 |
-10.2% |
|
American Airlines Group, Inc. |
18.50 |
20.35 |
-1.85 |
-9.1% |
|
Mettler-Toledo International Inc. |
1310.00 |
1422.43 |
-112.43 |
-7.9% |
|
NVIDIA Corporation |
735.00 |
796.11 |
-61.11 |
-7.7% |
|
American Express Company |
155.00 |
167.50 |
-12.50 |
-7.5% |
How accurate have the industry analysts been in predicting the future value of the S&P 500? Over the past five years, Industry analysts have underestimated the price of the index by 0.5% on average (using month-end values). Over the past 10 years, industry analysts have overestimated the price of the index by 1.5% on average (using month-end values). Over the past 15 years, industry analysts have overestimated the price of the index by 9.1% on average (using month-end values). It is interesting to note that on June 30, 2020, the bottom-up target price was 3327.64. One year later (on June 30, 2021), the S&P 500 closing price was 4297.50. Thus, industry analysts underestimated the closing price at the end of June 2021 by nearly 23% one year ago.
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