The optimistic scenario is the one sell-side analysts currently envision. There is no recession in the following 12 months, revenue growth accelerates and translates into significant EPS Growth. CEOs continue to provide optimistic projections into the future, high valuations are maintained, the AI boom brings productivity enhancements across many industry verticals.

2025 S&P 500 Earnings per Share: $280

Valuation Multiple: 24 x

SPY Median Price Target: $672 (Q3 2025)

Price Range (+/- 1 STD): $757 - $592

CAGR: 21%

ODDS: 40%

Is this scenario optimistic? Yes, clearly. Is it crazy? Absolutely not. As the chart shows, the implied 2024 Year End price target is close to 600 for SPY, which almost translates to 6.000 for the S&P 500. Although most major brokerages have lower estimates, Oppenheimer and Evercore ISI come very close to our target.

As far as 2025 is concerned the latest S&P 500 EPS estimates are trending toward $280 for FY2025. Notably, estimates for FY2024 were $270 at the start of 2022, but were subsequently revised lower as the reporting period approached — a common practice among analysts.

Nevertheless, an optimistic $280 EPS multiplied by the current 24 P/E ratio gets us to $6.720. It’s just math.