S&P 500 at 5400 is ‘probable and even conservative’

Oppenheimer Asset Management analysts suggest that a pause in the market rally would be reasonable after the robust gains witnessed in the fourth quarter of 2023.

Analysts note that it’s not uncommon for markets to take a breather following a substantial bull run, such as the one experienced from October through December.

Investors may naturally seize this opportunity to evaluate recent movements, emphasizing the market’s dependence on data until the fourth-quarter earnings season kicks off on January 12 with major banks reporting results.

Despite the potential pause, analysts remain optimistic, anticipating further upside in stock prices throughout the year, supported by improvements in fundamentals.

Notably, a record high for the could serve as a catalyst for additional gains, enhancing overall market sentiment.

Along these lines, analysts at Oppenheimer believe the S&P 500 is “conservatively undervalued below 5,400”.

“Our analysis indicates year-2 of the bull cycle is underway, and this road map leads us to expect upside into S&P 5,400,” analysts said.

“The 37% gain since Oct. 2022 is on par with typical returns following a non-recessionary reset, and the median return between months 15 and 27 (Dec. 2023 to Dec. 2024) has been 13% which is the basis for our expectation for S&P 5,400.”

“Many of our Big Numbers for 2024 confirms 5,400 as a probable, and even conservative, target based on a variety of historical studies. We see 4,600 as downside risk to start the year.”

The S&P 500 closed 2023 at 4,769.83.