Investing

Top Wall Street Analyst Expects S&P 500 to Rise Another 17%

Douglas A. McIntyre

Published: December 9, 2024 8:15 am

Key Points

• One of Wall Street’s biggest bulls expects the S&P 500 to increase another 17% next year.
• Other analysts think the market could become too expensive in the coming year.
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The stock market has had among its most extraordinary runs in history. So far in 2024, it is up 28%. It has almost doubled over the past five years, as the S&P 500 is 94% higher. Based on how expensive the market is in terms of its historical price-to-earnings (PE) ratio, it should not have surged so much. The man among Wall Street’s biggest bulls expects another 17% increase next year to 7,100. No other analyst from a major firm has a forecast that is so optimistic.

According to Bloomberg, Oppenheimer Asset Management’s Chief Investment Strategist John Stoltzfus recently announced the firm’s new 7,100 target. Specifically, he wrote, “the current bull market likely has legs strong enough to climb the proverbial ‘wall of worry’ into and through 2025.” A wall of worry is all the factors that could derail the market. These included geopolitical challenges, inflation, faltering earnings, and unemployment.

Why does no other major investment bank have a 2025 forecast nearly as aggressive as Oppenheimer’s? They think the market could become too expensive next year.

Based on current history, another challenge is that the S&P 500 PE is high. Except for a rapid rise and fall due to the COVID-19 pandemic, it has been at 24 or below since mid-2004. It did top 37 in early 2021 but quickly sold off to 20 by early 2023. It has risen most months since then and trades at 31 today.

Is 31 times too expensive. The list of things that could drop the index is long.

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