S&P 500 Index Projected to Reach 5,100 by End of Next Year

According to equity analysts at Citigroup, the S&P 500 index may climb to 5,100 by the end of next year, signifying a widening of the U.S. stock market's ongoing rally.

Citi's price target for the end of 2024 is based on their projection that the S&P 500's earnings per share will rise to $245. In a research note released on Friday, the bank's equity analysts, led by Scott Chronert, adjusted their midyear 2024 target to 4,800 from 5,000.

While the U.S. stock market has experienced a surge during the fourth quarter, with the S&P 500 trading at approximately 4,607 at last check on Friday afternoon (according to FactSet data), it has achieved an overall growth of around 20% this year. This positive performance can be attributed to a resilient economy, despite the Federal Reserve implementing measures to control inflation.

The Citi Research analysts affirm their optimism towards U.S. equities, emphasizing improving earnings growth as a driving factor. Despite lingering recession risks, they anticipate a broader market expansion beyond the leadership of Mega Cap Growth in 2023. The Citi analysts also anticipate an acceleration in index earnings growth, influenced by positive contributions across sectors and a greater number of individual stocks.

Read: Would a 2024 recession be 'dire' for stocks? Why Citi expects S&P 500 earnings to climb next year.

Citi Lowers Midyear 2024 Target for S&P 500 Amid Economic Concerns

Citi analysts have revised their midyear 2024 target for the S&P 500 downward to 4,800, citing a potential slowdown in the economy during the first half of the year. In a recent note, they also stated that their year-end target for 2024 assumes a resolution of any recession, evolution of Fed policies, above-consensus earnings growth, and a multiple not far from current levels.

According to the note, the S&P 500's current price-to-earnings ratio is 20.7.

Predictions on where the S&P 500 will stand at the end of 2024 have been widely varied on Wall Street. Market strategists are divided on whether the index will surpass or fall below 5,000 next year, as reported by FactSet senior earnings analyst John Butters.

"Butters wrote in the report: 'On December 7, the bottom-up target price for the S&P 500 was 5,068.41, which was 10.5% above the closing price of 4,585.59.'"

Meanwhile, the U.S. stock market showed modest gains on Friday as investors assessed an employment report revealing stronger-than-expected job growth in November. At last check, the S&P 500 was up 0.5%, along with a similar increase in both the Dow Jones Industrial Average and the Nasdaq Composite.

Read: S&P 500 may rise 10% by end of 2024 amid worries that small-cap stocks 'can't hack' higher rates, says BofA

# The S&P 500 Continues to Climb

The S&P 500 is poised to record a weekly gain of 0.3%, potentially extending its winning streak to a sixth consecutive week. According to Dow Jones Market Data, this would mark the index's longest stretch of continuous gains since the period ending on November 15, 2019.