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Goldman Sachs: S&P Will Hit 2150 By August

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In a new report, analysts at Goldman Sachs discuss how equity markets will react to improving economic conditions in the U.S.

The discussion includes a response to Janet Yellen’s recent statement that equities are expensive, three-month and 12-month projections for the S&P 500, and which stocks are Goldman's most preferred.

Goldman Agrees With Fed Chair

Analyst believe that Fed Chair Janet Yellen was on target with her assessment that equity prices are high but that low bond yields support the high valuations for now.

Goldman is calling for strong U.S. consumer performance to continue to drive GDP growth to the tune of 3.0 percent in Q2, and they see further upside to the stock market while bond yields remain low.

Related Link: With 10% Of Companies Left To Report, Where Does S&P 500 Q1 Earnings Growth Stand?

Major Short-Term Upside

Analysts project that the S&P 500 will reach 2150 within the next three months, a 3.0 percent gain from current levels. However, they also believe that the market will begin to cool off over the following nine months once the Federal Reserve begins raising interest rates.

Goldman is calling for the S&P 500 to end the year at 2125 and fall to 2100 by May 2016.

Preferred Sectors

Under the current favorable economic conditions, Goldman is overweight stocks in the Information Technology, Energy and Telecom Services sectors.

Of the stocks in Goldman’s Cyclicals basket, the firm sees the post potential upside in Southwest Airlines Co (NYSE: LUV), Delta Air Lines, Inc. (NYSE: DAL), General Motors Company (NYSE: GM), Valero Energy Corporation (NYSE: VLO) and L-3 Communications Holdings, Inc. (NYSE: LLL).

Latest Ratings for LUV

Jun 2017ArgusUpgradesHoldBuy
Jun 2017Atlantic EquitiesInitiates Coverage OnNeutral
Jan 2017JP MorganDowngradesOverweightNeutral

View More Analyst Ratings for LUV
View the Latest Analyst Ratings

Posted-In: Goldman Sachs S&P ForecastAnalyst Color Long Ideas Economics Markets Analyst Ratings Trading Ideas Best of Benzinga


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