Goldman Sachs' David Kostin raised his S&P 500 year-end target to 4500 from 4000, suggesting another 5% upside from current levels.

The commented, "We raise our S&P 500 year-end price target to 4500 (from 4000), representing 5% upside from the current 4299 level. Our unchanged 2023 EPS forecast of $224 assumes a soft landing and is above the top-down consensus of $206. GS Economics assigns a 25% probability of recession in the next 12 months, compared with 65% for consensus. The P/E multiple of 19x is greater than we expected, led by a few mega cap stocks. But prior episodes of sharply narrowing breadth have been followed by a “catch-up” from a broader valuation re-rating. The potential profit boost from AI has expanded the right tail for equities, while left tail risks from recession and hawkish Fed policy remain. We highlight a screen of cyclical laggards."