Goldman’s Kostin Says S&P 500 to Be Pricier as Laggards Catch Up
- S&P 500’s profit multiple could hit 21 times as rally expands
- Easing inflation, falling bond yields could also boost stocks
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The S&P 500’s high valuation is reasonable and could rise further this year as laggards of the index join the surge in winners from artificial intelligence, according to Goldman Sachs Group Inc. strategists.
While the broker’s base-case scenario is for the S&P 500’s price-to-earnings ratio to shrink slightly to 19 times from the current level of about 20 by the end of 2023, strategists led by David J Kostin said the risks to valuations are now skewed to the upside.