Bank of America increases S&P 500 profit projections due to the impact of the AI surge.
Bank of America strategists raised their 2024 S&P 500 earnings per share (EPS) estimates to $250 on Tuesday, marking an increase from the earlier projection of $235.
The latest projection, the most optimistic top-down forecast on Wall Street, suggests a year-over-year (YoY) increase of around 12%.
In the fourth quarter, companies outperformed expectations, prompting our economists, led by Ohsung Kwon, to increase their 2024 GDP forecast to +2.7% year-over-year. This is an upgrade from the previous estimate of +1.4% in November, as mentioned in a note on Tuesday.
The 1.3 percentage point rise in the GDP forecast results in a 5 percentage point enhancement to EPS growth, assuming everything else remains constant. According to the strategists, 2023 served as a transitional period for Corporate America, and companies have successfully adapted to the increased rate and subdued demand environment.
Bringing you the latest updates on finance, economies, stocks, bonds, and more. Stay informed with timely insights.
Be First to Comment