The S&P 500 rose to a new all time high last week after the Fed indicated plans for three rate cuts were still on the cards for 2024.
Can the index improve on its stellar performance in the next 12 months?
In 2023, IBD MarketSurge's monthly chart shows the index gained more than 24%. Year to date, the index has gained a further 9.5%.
Looking forward, analysts polled by FactSet expect the S&P 500, on aggregate, to gain 7% over the next twelve months. That's a calculation from Wednesday's closing price of 5224.62 to analysts' price target of 5589.06.
Though analysts have overestimated price targets in the past, on average analysts have been trimming back their projections in recent years. According to a FactSet report, 20 years ago, analysts were off the mark by 8.3%. In the recent five years, the difference between price estimates and actual price improved to 4.6%.
But in recent months, FactSet's price estimates have actually trailed the S&P 500's performance. On March 31, 2023, the one-year price target for the S&P 500 was 4635.48. Nearly a year later, as of Friday's closing, the S&P 500 beat that target by 12.9%.
S&P 500 Sectors And Stocks
Health care and real estate sectors are projected to have the highest price gains during the next 12 months, according to FactSet's research. Both health care and real estate sectors are expected to climb about 10% 12 months from now.
At the opposite end of forecasts, the materials sector is seen climbing only 1% and industrials just 2.5%. Both more or less achieved the price target analysts had a year ago.
At the single-stock level, some unlikely candidates show higher potential for price gains. Stocks with the highest expected price gains include First Solar and even Boeing.
Boeing — No. 5 on the highest estimates list — have been battered this year amid a series of safety and quality issues, mainly in its 737 Max program. The company said Monday CEO Dave Calhoun will step down at the end of 2024.
Those with the least potential for price gains include Airbnb and Steel Dynamics.
Top & Bottom 5 Stocks Expected Performance
Analysts' aggregate projected price performance for next 12 months:
| Company | Ticker | Target | Close* | Difference ($) | % Difference |
|---|---|---|---|---|---|
| Top 5 | |||||
| First Solar | FSLR | 225 | 151.02 | 73.98 | 49% |
| Caesars Entertainment | CZR | 62 | 41.74 | 20.26 | 48.5% |
| AES | AES | 22 | 15.54 | 6.46 | 41.6% |
| Insulet | PODD | 234.66 | 167.2 | 67.46 | 40.3% |
| Boeing | BA | 262 | 187.78 | 74.22 | 39.5% |
| Bottom 5 | |||||
| Fastenal | FAST | 63 | 77.66 | -14.66% | -18.9% |
| Steel Dynamics | STLD | 119.5 | 142.72 | -23.22 | -16.3% |
| WestRock | WRK | 42 | 49.44 | -7.44 | -15% |
| Robert Half | RHI | 70 | 80.19 | -10.19 | -12.7% |
| Airbnb | ABNB | 145 | 164.71 | -19.71 | -12% |
* Closing price on March 20.
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