The average S&P 500 year-end target from 15 Wall Street Strategists suggests a 20% gain from current levels. Many strategists believe the S&P 500 will reach a bottom between 3400 and 3600 before moving higher in the fall.
I am less optimistic and believe the P/E multiple may need to come down as interest rates move higher. The S&P 500 average earnings per share estimate is $226; a P/E multiple of 19x would result in the S&P 500 ending the year around 4300, in line with the 3yr and 5yr averages.
- On December 31, 2019, the S&P 500 closed at 3230. If you compounded a 10% annual return for three years, you would end 2022 at 4299.
- On December 31, 2017, the S&P 500 closed at 2673. If you compounded a 10% annual return for five years, you would end 2022 at 4304.
| Firm | Strategist | 2022 S&P 500 | 2022 EPS | Implied P/E |
|---|---|---|---|---|
| Bank of America Merril Lynch | Savita Subramanian | 4500 | $173 | 26.01 |
| Barclays | Maneesh Deshpande | 4500 | $223 | 20.18 |
| BMO | Brian Belski | 4800 | $245 | 19.59 |
| CFRA | Sam Stovall | 4675 | $228 | 20.50 |
| CITI | Scott Chronert | 4200 | $226 | 18.58 |
| Credit Suisse | Jonathan Golub | 4900 | $235 | 20.85 |
| Deutsche Bank | Binky Chadha | 4750 | $230 | 20.65 |
| Evercore ISI | Julian Emanuel | 4800 | $228 | 21.05 |
| Goldman Sachs | David Kostin | 4300 | $226 | 19.03 |
| JPMorgan Chase | Dubravko Lakos-Bujas | 4900 | $230 | 21.30 |
| Morgan Stanley | Mike Wilson | 3900 | $225 | 17.33 |
| Oppenheimer | John Stoltzfus | 5330 | $230 | 23.17 |
| RBC | Lori Calvasina | 4700 | $231 | 20.35 |
| UBS | Keith Parker | 4850 | $242 | 20.04 |
| Wells Fargo Investment Institute | Darrell Cronk | 4300 | $220 | 19.55 |
| Average | 4627 | $226 | 20.55 |
When projecting the future of markets, it’s important to remain humble and not become anchored to an outlook or believe you have an investment super-power. I monitor the data and the opinions of others and try to make prudent decisions. I will continue to monitor the data and keep you informed.
