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Industry Analysts Predict a 15% Price Increase for the S&P 500 Over the Next 12 Months

Earnings

By John Butters  |  October 12, 2021

The price of the S&P 500 increased by 14.4% during the first two quarters of the year (to 4297.50 from 3756.07), but only increased by 0.2% during the third quarter (to 4307.54 from 4297.50). 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 14.8% 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 October 6. 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 the companies in the index. On October 6, the bottom-up target price for the S&P 500 was 5051.70, which was 14.8% above the closing price of 4399.76.sandp500-closing-price

At the sector level, the Communication Services (+18.0%) sector is expected to see the largest price increase, as this sector had the largest upside difference between the bottom-up target price and the closing price on October 6. On the other hand, the Financials (+7.8%) 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 October 6.

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 October 6) can be found in the tables below.

S&P 500: Difference Between Median Target Price & Closing Price: Top 10

Company Target Closing Diff ($) DIFF (%)
Western Digital Corporation 92.00 57.39 34.61 60.3%
Las Vegas Sands Corp. 58.00 37.12 20.88 56.3%
Incyte Corporation 98.00 65.65 32.35 49.3%
Activision Blizzard, Inc. 115.00 77.36 37.64 48.7%
Under Armour, Inc. Class C 27.00 18.28 8.72 47.7%
Biogen Inc. 425.00 287.77 137.23 47.7%
Moderna, Inc. 453.00 309.36 143.64 46.4%
Vertex Pharmaceuticals Inc. 260.00 180.02 79.98 44.4%
Tapestry, Inc. 55.00 38.18 16.82 44.1%
Global Payments Inc. 230.00 159.87 70.13 43.9%

Source: FactSet

S&P 500: Difference Between Median Target Price & Closing Price: Bottom 10

Company Target Closing Diff ($) DIFF (%)
Lumen Technologies, Inc. 11.00 12.70 -1.70 -13.4%
Xilinx, Inc. 146.50 158.07 -11.57 -7.3%
Ceridian HCM Holding, Inc. 110.00 118.53 -8.53 -7.2%
Marriott International, Inc. CI. A 146.50 157.75 -11.25 -7.1%
Paycom Software, Inc. 475.50 511.69 -36.19 -7.1%
ONEOK, Inc. 57.00 60.75 -3.75 -6.2%
Comerica Incorporated 79.10 84.15 -5.05 -6.0%
Robert Half International Inc. 101.00 107.14 -6.14 -5.7%
Juniper Networks, Inc. 27.00 28.63 -1.63 -5.7%

Source: FactSet

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 1.7% on average (using month-end values). Over the past 10 years, industry analysts have overestimated the price of the index by 0.8% on average (using month-end values). Over the past 15 years, industry analysts have overestimated the price of the index by 8.1% on average (using month-end values). Over the past 20 years, industry analysts have overestimated the price of the index by 9.6% on average (using month-end values).

It is interesting to note that on September 30, 2020, the bottom-up target price was 3775.94. One year later (on September 30, 2021), the S&P 500 closing price was 4307.54. Thus, industry analysts underestimated the closing price at the end of September 2021 by 12% one year ago.

Ssandp500-sector-level

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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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