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