S&P 500 target of 9,000 on earnings
Jay Hatfield argued that the S&P 500 can reach a target of 9,000 by 2027, driven entirely by robust corporate earnings growth and free cash flow development.
The argument
He explained that earnings growth is primarily fueled by retained earnings and strong return on invested capital rather than robust GDP growth. His target applies a 23x multiple to 2027 earnings, which assumes lower interest rates and an end to geopolitical conflicts.
The thesis, stress-tested
✓ What validates it
- ✓S&P 500 consensus earnings estimates for 2027 continue to revise upward
- ✓The Federal Reserve initiates interest rate cuts
▸ Risks discussed
- ▸Interest rates remain elevated for longer than expected
- ▸Geopolitical conflicts fail to resolve, keeping energy prices high
Hear it yourself
"Jay Hatfield joins us to get us the PPI here, in a moment. I mean, you're making a moment to moment in in your note. You have an optimistic tone on the opening of the Gulf Of Hormuz. You're beholden to whatever the headlines are like everyone else. Mhmm. Well, we've had a non consensus view that the Iranians would not come to the table just using common sense. I didn't study Iranian studies in at Wharton, but they've been, warring with The US for forty seven years. So why all of a sudden after we killed their top leaders, are they going to capitulate? So we actually view this more aggressive move as bullish."
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