Industry Analysts Project 21% Increase in S&P 500 Price Over the Next 12 Months

After declining by more than 4% since the end of February, 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 21.3% over the next twelve 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 27). 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 27, the bottom-up target price for the S&P 500 was 6,904.84, which was 21.3% above the closing price of 5,693.31.

At the sector level, the Information Technology (+30.4%), Consumer Discretionary (+27.0%), and Communication Services (+25.1%) sectors are expected to see the largest price increases, as these three sectors had the largest upside differences between the bottom-up target price and the closing price on March 27. On the other hand, the Consumer Staples (+11.1%), Energy (+12.0%), and Financials (+12.2%) sectors are expected to see the smallest price increases, as these three sectors had the smallest upside differences between the bottom-up target price and the closing price on March 27.

At the company level, the ten stocks in the S&P 500 with the largest upside and downside differences between their median target price and closing price (on March 27) can be found below.

It is interesting to note that while the price of the S&P 500 has declined by 4.4% since the end of February (to 5,693.31 from 5,954.50), the bottom-up target price has decreased by only 0.5% (to 6,904.84 from 6,943.00) during this same period. Thus, are industry analysts still confident in their current predictions despite the recent decline in the closing price of the index? Or are industry analysts waiting for the upcoming earnings season to revise their company-level target prices?

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