Deutsche Bank strategists raised their year-end target to 5,500, up from 5,100 previously.
The revision is based on a strong earnings cycle and the anticipation that market confidence will increase later in the year, which should positively influence US stocks.
“We see the earnings cycle as having many paths,” the strategists said in a note to clients on Friday.
“While not all growth may be realized this year, we see market confidence in a continued recovery increasing towards the end of the year, supporting stock multiples.”
However, strategists also warned of possible market volatility due to geopolitical risks. Additionally, they warned that a marred election poses a “real risk” to markets.
The brokerage firm noted that while not all growth may materialize this year, market confidence in a continued recovery is expected to increase toward the end of the year. This sentiment is expected to support the stock's multiples.
In addition to the revised index target, Deutsche Bank has also raised its base case for S&P 500 earnings to $258 per share from the previous estimate of $250. This adjustment indicates a year-on-year growth of 13%.
If macroeconomic growth continues to outperform trends as it has over the past seven quarters, strategists suggest earnings could reach as much as $271 per share, which is at the high end of their original forecast range of $250 to $271. Dollars.
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