S＆P 500 Outlook For 2022: 10% Upside, Goldman Cuts Target Again

Nowadays, Russia and Ukraine are fighting fiercely, inflation remains high, and the S&P 500 index runs to the key point of 4200.

A month ago, Most Wall Street analysts remain optimistic, It is believed that based on strong corporate profits, steady economic growth and supply chain pressure, there is still about 10% upside space for the S&P 500 index this year (compared with 2021), and the range of 4800-5000 is the relatively consistent consensus of major investment banks.

$Goldman Sachs(GS)$: 4700

Goldman Sachs, which has the most accurate forecast in 2021, lowered the target point of the S&P 500 index again within one month, Analyst David Kostin believes that the greater risk in the market stems from the rise in commodity prices, which leads to weak consumer demand and economic growth. They revised the forecast of the S&P 500 in 2022 from the previous 4,900 points to 4,700, and the earnings per share in 2022 will increase by 5% to $221, lower than the previous estimate of $226.

Goldman Sachs' initial target of 5,100 was lowered last month amid fears that the Federal Reserve would tighten policy more aggressively than previously expected to curb soaring inflation, triggering a market crash. Since then, the sell-off has intensified as the invasion of Ukraine by Russia（one of the world's leading commodity producers）has intensified commodity price pressures. The target of 4,700 means that it is still 10% higher than the current level, which is considered to have "partially priced" the risk of economic recession. However, in a pessimistic situation, it is expected that the decline in earnings and valuation multiples will cause the S&P 500 index to fall by 15% to 3600. Investors are advised to maintain their holdings in the energy and health care industries to tide over the difficulties.

$JPMorgan Chase(JPM)$: 5050

Analysts at JPMorgan Chase are equally bullish on the outlook for the stock market this year, with thetargeting price about 20% above the current level of the S&P 500 index.

According to the bank, as the labor market continues to recover, consumers have abundant cash and supply chain problems have eased, the profit growth is "strong", and US stocks should rise slightly in 2022. JPMorgan sees the main risk to the market outlook as a "hawkish shift in central bank policy", especially as supply chain problems and labour shortages persist.

$UBS Group AG(UBS)$: 4850

UBS analysts said the market should be able to overcome concerns about the pandemic and high valuations, and they expect the S&P 500 index to rise nearly 5% next year compared with 2021. While stocks "may see a correction at some point," strong corporate earnings and a drop in eventual cases of the pandemic helped drive the market higher.

$Bank of America(BAC)$: 4600

Bank of America analysts believe that there are too many similarities between today's market and 1999-2000. With stock markets showing signs of excessive speculation and high valuations, the current environment resembles the bursting of the dot-com bubble in 2000. Bank of America is predicting negative stock market growth over the coming year amid heightened concerns about negative real interest rates, soaring inflation, a frenzy of IPO activity and liquidity risks.

$Morgan Stanley(MS)$: 4400

Morgan Stanley is one of the most pessimistic investment banks on Wall Street, and its analysts predict that the S&P 500 index will fall by nearly 5% in 2022. With liquidity tightening and earnings growth slowing, the S&P 500 index may pull back in 2022, and the current valuation does not look attractive. At present, Damo's prediction is the most accurate.

$Bank of Montreal(BMO)$: 5300

Unlike Morgan Stanley, BMO analysts are one of the most optimistic analysts on Wall Street. They predict that the S&P 500 index will reach 5,300 points by the end of 2022, which is 26% higher than the current 4,200 points.

The bank believes that investors are too concerned about inflation, which should ease as the pressure on the supply chain eases. BMO analysts believe solid corporate earnings continue to drive stocks higher in 2022. More importantly, the Fed's balance sheet "will remain very large for a long time, which will continue to support the stock market.