The U.S. stock market has remained largely stagnant in 2023, except for a few high-performing technology stocks. However, analysts on Wall Street are still optimistic about the future. According to projections for individual stock performance over the next 12 months, the S&P 500 index is expected to rise by 19% from its level on September 21. This analysis from FactSet’s John Butters suggests that the index would need to break above 5,000 for the first time to achieve these projections.
The anticipated growth of the S&P 500 is driven by optimistic earnings growth forecasts. While the past three quarters have seen year-over-year earnings declines, analysts expect earnings to grow by 12.2% in 2024. These estimates are based on aggregate projections from sell-side analysts for individual stocks. At the sector level, information technology is expected to lead with a projected gain of 22.8%, followed by consumer discretionary and real estate.
Further analysis by Butters reveals the top 10 stocks that Wall Street is most optimistic about, as well as the 10 stocks expected to lag behind the rest of the index. Among the outperformers are SolarEdge Technologies, Inc., Insulet Corporation, and DexCom, Inc., while the laggards include Expeditors International of Washington, Inc. and Tyson Foods, Inc. Class A.
Despite recent market volatility triggered by rising Treasury yields, the S&P 500 remains up by 13% since the beginning of the year.