Deutsche Bank Raises S&P 500 Year-End Target to 5,750 on Strong Earnings and Inflows

Deutsche Bank ups S&P year-end target to 5,750 on strong earnings, buybacks, inflows

Deutsche Bank has raised its year-end target for the S&P 500 (SP500), bolstered by broadening earnings growth, rising share buybacks, robust inflows that have been lifted by strong risk appetite, and just-above-normal positioning. Analysts led by Binky Chadha and Parag Thatte raised their target for Wall Street's benchmark index to 5,750 points from 5,500. That implies an upside of 2.20% from the S&P's (SP500) Friday closing price of 5,626.02. "Our base case sees a recovery from the current ongoing pullback melding into the potential typical election pullback, before rallying into year end," Chadha and Thatte said in a note on Thursday. A continued bull run driven by the artificial intelligence craze and expectations for Federal Reserve interest rate cuts have led to several brokerages raising their S&P year-end targets multiple times, with some even predicting the index to end 2024 as high as 6,000. According to their Friday note, Deutsche Bank remains neutral on MCG (mega cap growth) & Tech, "with derating advanced but growth slowing; overweight the Financials, Consumer Cyclicals and Materials with the broader cycle still having plenty of legs." Chadha and Thatte remain neutral on Industrials with the benefits from mega trends priced in, and neutral on Energy since "they remain at the mercy of oil prices." Among the defensive sectors, Deutsche Bank is neutral on Utilities "as the rates rally is well advanced and positioning is elevated." Real estate is neutral, and the rest remain underweight. "We see S&P 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions," the note said. The analysts see 2024 earnings per share at $258, up 13%, and EPS next year 10.5% higher at $285. As for the November elections, there has historically been a market pullback a month before the vote, "then a rally on a clear resolution," they said. "If the polls were to widen significantly again, prospects of a blue or red sweep and a focus on implied policies will reemerge."

Deutsche Bank raises S&P 500 year-end target to 5,750 from 5,500

(Reuters) - Deutsche Bank has raised its year-end target for the benchmark S&P 500 index to 5,750 points from 5,500, citing rising stock buybacks, strong corporate earnings and robust inflows, boosted by strong risk appetite. "We see S&P 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions," Deutsche Bank strategists said in a note on Sept. 12. The new target represents a 2.75% upside to S&P's close of 5,595.76 on Thursday. Rising U.S. rate cut expectations this year and the hype surrounding artificial intelligence (AI) have boosted the index, with many brokerages lifting their annual targets for the benchmark and some expecting it to end 2024 as high as 6,000. In May, Deutsche Bank raised its year-end target for the S&P to 5,500, banking on strong corporate earnings to support equity valuations. The brokerage said a recent pullback in stocks in August due to fears of a weakening labor market and de-rating of technology stocks seems "done" for now, with positioning falling back in line with earnings growth. It added that fears of a cooling labor market have been put to rest with August payrolls growth steadying on a year-to-date basis. Some aspects that will strengthen the market include a move from "de- to re-stocking", a pickup in capital expenditure outside tech stocks, broader manufacturing recovery, and a rise in consumer confidence, strategists led by Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank, said. The brokerage expects share buybacks to rise to about $1.2 trillion next year as they keep up with earnings, from the current $1 trillion. Inflows into equities have been strong over the last four months and have defied typical seasonality, "which raises prospective corporate earnings and equity returns," it said. Deutsche Bank also reiterated its earnings per share (EPS) forecast for S&P 500 companies at $258 for 2024 and $285 for 2025. (Reporting by Kanchana Chakravarty in Bengaluru; Editing by Savio D'Souza and Sonia Cheema)

Deutsche Bank raises S&P 500 year-end target to 5,750 from 5,500

Sept 13 (Reuters) - Deutsche Bank has raised its year-end target for the benchmark S&P 500 (.SPX), opens new tab index to 5,750 points from 5,500, citing rising stock buybacks, strong corporate earnings and robust inflows, boosted by strong risk appetite. "We see S&P 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions," Deutsche Bank strategists said in a note on Sept. 12. Advertisement · Scroll to continue The new target represents a 2.75% upside to S&P's close of 5,595.76 on Thursday. Rising U.S. rate cut expectations this year and the hype surrounding artificial intelligence (AI) have boosted the index, with many brokerages lifting their annual targets for the benchmark and some expecting it to end 2024 as high as 6,000. In May, Deutsche Bank raised its year-end target for the S&P to 5,500, banking on strong corporate earnings to support equity valuations. Advertisement · Scroll to continue The brokerage said a recent pullback in stocks in August due to fears of a weakening labor market and de-rating of technology stocks seems "done" for now, with positioning falling back in line with earnings growth. It added that fears of a cooling labor market have been put to rest with August payrolls growth steadying on a year-to-date basis. Some aspects that will strengthen the market include a move from "de- to re-stocking", a pickup in capital expenditure outside tech stocks, broader manufacturing recovery, and a rise in consumer confidence, strategists led by Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank, said. The brokerage expects share buybacks to rise to about $1.2 trillion next year as they keep up with earnings, from the current $1 trillion. Inflows into equities have been strong over the last four months and have defied typical seasonality, "which raises prospective corporate earnings and equity returns," it said. Deutsche Bank also reiterated its earnings per share (EPS) forecast for S&P 500 companies at $258 for 2024 and $285 for 2025. Reporting by Kanchana Chakravarty in Bengaluru; Editing by Savio D'Souza and Sonia Cheema Our Standards: The Thomson Reuters Trust Principles., opens new tab

Deutsche Bank raises S&P 500 year-end target to 5,750 from 5,500

"We see S&P 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions," Deutsche Bank strategists said Deutsche Bank has raised its year-end target for the benchmark S&P 500 index to 5,750 points from 5,500, citing rising stock buybacks, strong corporate earnings and robust inflows, boosted by strong risk appetite. "We see S&P 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions," Deutsche Bank strategists said in a note on Sept. 12. The new target represents a 2.75% upside to S&P's close of 5,595.76 on Thursday. Rising U.S. rate cut expectations this year and the hype surrounding artificial intelligence (AI) have boosted the index, with many brokerages lifting their annual targets for the benchmark and some expecting it to end 2024 as high as 6,000. In May, Deutsche Bank raised its year-end target for the S&P to 5,500, banking on strong corporate earnings to support equity valuations. The brokerage said a recent pullback in stocks in August due to fears of a weakening labor market and de-rating of technology stocks seems "done" for now, with positioning falling back in line with earnings growth. It added that fears of a cooling labor market have been put to rest with August payrolls growth steadying on a year-to-date basis. Some aspects that will strengthen the market include a move from "de- to re-stocking", a pickup in capital expenditure outside tech stocks, broader manufacturing recovery, and a rise in consumer confidence, strategists led by Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank, said. The brokerage expects share buybacks to rise to about $1.2 trillion next year as they keep up with earnings, from the current $1 trillion. Inflows into equities have been strong over the last four months and have defied typical seasonality, "which raises prospective corporate earnings and equity returns," it said. Deutsche Bank also reiterated its earnings per share (EPS) forecast for S&P 500 companies at $258 for 2024 and $285 for 2025. (Reporting by Kanchana Chakravarty in Bengaluru; Editing by Savio D'Souza and Sonia Cheema)