TechFlow, July 8 — According to Jinshi Data, Goldman Sachs has once again raised its target level for the S&P 500 index in less than two months. In a report led by David Kostin, Goldman strategists wrote: "Earlier and deeper monetary easing by the Fed than previously expected, bond yields lower than our prior forecasts, sustained strong fundamentals in large-cap stocks, and investors' willingness to overlook potential short-term earnings weakness have collectively supported our decision to raise the forward P/E expectation for the S&P 500 from 20.4x to 22x. The 3-month, 6-month, and 12-month return forecasts for the S&P 500 are now raised to +3%, +6%, and +11% respectively, with new targets of 6,400, 6,600, and 6,900 points—up from previous estimates of 5,900, 6,100, and 6,500 points."
The strategists maintain their forecast for 7% EPS growth in the S&P 500 for both 2025 and 2026 but note that this outlook carries two-sided risks. A key downside factor for EPS forecasts is the final level of tariffs and their impact on corporate profits. Although narrowing market breadth often signals above-average downside risk, the firm's analysts believe 'chasing gains' is more likely than 'chasing losses,' and expect the market rally to broaden over the coming months. They remain overweight on software and services, materials, utilities, media and entertainment, and real estate.
