Bank of America Raises 2024 S&P 500 EPS Forecast to $250, Reflecting 12% YoY Upside

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.