Industry Analysts Predict a 17% Price Increase for the S&P 500 Over the Next 12 Months

Since December 31, the price of the S&P 500 has increased by 2.8% (to 3948.72 from 3839.50). Where do industry analysts believe the price of the S&P 500 will go from here?

Industry analysts in aggregate predict the S&P 500 will see a price increase of 17.0% 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 yesterday (March 23). 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 March 23, the bottom-up target price for the S&P 500 was 4618.53, which was 17.0% above the closing price of 3948.72.

At the sector level, the Energy sector is expected to see the largest price increase (+31.9%), as this sector had the largest upside difference between the bottom-up target price and the closing price on March 23. On the other hand, the Information Technology sector is expected to see the smallest price increase (+6.3%), as this sector had the smallest upside difference between the bottom-up target price and the closing price on March 23.

Since bottoming at 4462.23 on November 9, 2022, the bottom-up target price for the S&P 500 has increased by 3.5%. Ten of the eleven sectors have seen an increase in their bottom-up target price since November 9, led by the Industrials sector at 8.4% (to 945.31 from 871.92). On the other hand, the Consumer Discretionary sector is the only sector that has seen a decrease in its bottom-up target price over this time at -2.3% (to 1339.98 from 1371.03).

Given the recent concerns in the market about the banking industry, it is interesting to note that the bottom-up target price for the Financials sector has declined by 0.8% since February 28 (to 656.22 from 661.57). However, the bottom-up target price for this sector is still 27% above the closing price for this sector as of yesterday (516.28).

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