Morgan Stanley expects S&P 500 to hit 4,500 by 2024-end
On Monday, Morgan Stanley revealed its projection for the S&P 500 to reach 4,500 by the end of 2024, indicating a 2% increase from its present standing. The index wrapped up last week at 4,415.24, showing a 1.6% growth. The financial firm anticipates a steady earnings revival throughout the year. A team of strategists led by Michael Wilson forecast a 7% rise in earnings per share (EPS) for companies within the index in the upcoming year.
Revenue growth and margin expansion
Besides the anticipated EPS enhancement, Morgan Stanley's experts predict a 4-5% surge in revenue for S&P 500 businesses in 2023. They also expect a "modest" expansion in margins as labor expenses diminish. Nevertheless, short-term earnings challenges are likely to continue into the early part of next year before a "durable" recovery takes root, as stated by Wilson.
Strong earnings environment in 2025
Peering further into the future, Wilson envisions a robust earnings climate in 2025, with a remarkable 16% increase in profits for S&P 500 firms. This growth is projected to be fueled by artificial intelligence-driven advancements in productivity and margin expansion. The forecast underscores the potential influence of technological innovations on the financial market and corporate profitability in the years ahead.
