We raise our S&P 500 year-end target from 5200 to 5600 (+3% from current level) driven by milder-than-average negative earnings revisions and a higher fair value P/E multiple (from 19.5x to 20.4x).
Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates.
We expect roughly unchanged real yields by year-end and strong earnings growth will support a 15x P/E for the equal-weight S&P 500 and a 36% premium multiple for the market-cap index.