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|
|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|
|Wells Fargo Investment Institute||Darrell Cronk||4300||$220||19.55|
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.