Last week, risk markets bounced back even as global bond yields largely continued their climb. The S&P 500 gained +2.64% on the week (+0.10% Friday), and rose to a record high for the first time since mid-February on Thursday. US equity strategists at Deutsche Bank now forecast the S&P 500 Index at 4100 by year-end from a previous 3950 target.
Key quotes
“We have upgraded earnings and equity targets in light of the passing of the US stimulus bill. We have raised our year end 2021 S&P 500 target to 4100 (20.2x $202) from 3950 previously, and to 465 for the Stoxx 600 (17.2x €27) from 450. From current levels, these imply upside of another 5% for the US and 10% for Europe.
“Our earnings estimates for US (S&P 500) EPS in 2021 increased from $194 to $202 (+43% YoY) and up to $222 for 2022 (+10% YoY). For Europe (Stoxx 600) we’ve raised 2021 earnings growth from +47% YoY to +59%. Reflecting the fact that multiples are already very high, especially in the US, we think these will fall slightly.”
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