Larry Berman's market forecasts for 2024
BNN Bloomberg
The Street forecast for next year is fluid.
The top-down strategists are currently around 4,800 as the average target for the end of next year. This speaks to how much good news is already priced in. The bullish strategists are at 5,100 to 5,200 while the bears are in the 4,200 to 4,600 range. Looks like a pretty dull year with low volatility. The bears see zero earnings-per-share (EPS) growth and the bulls see more than 10 per cent EPS growth. In all cases, the multiples are in the range of 19 to 21 times.
From the bottom up, if you take the 12-month price target on every stock and weight it by the index, you get about 5,100. Keep in mind this is every stock hitting its price target at the same time, which is not practically possible. Historically, when the market gets within 10 per cent of that number, it’s fully valued. We are already there now.
From top-down and bottom-up perspectives, there is not much juice left to squeeze. I’m going with the under in terms of year-end target for both EPS and level. If the economy is going to be as strong at six per cent EPS growth would suggest, then the FOMC will not be cutting rates at all, in my view. If we get a hard landing, EPS falls 10 per cent or more and the multiple is closer to 16-times or less and not 20-times. To say the market is close to fully valued is an understatement. Don’t shoot the messenger.
