The Roaring 2020s? Analyst's 2025 S&P 500 Target Of 6,000 Hinges On Key Milestone

Lower inflation figures, robust employment statistics, and declining Treasury yields have propelled the SPDR S&P 500 Trust (ARCA:SPY) to a new 52-week high on Monday. Edward Yardeni, founder and President of Yardeni Research, however, believes that this upward trend in the stock market could be at its beginning stages, contingent on a particular stipulation.

Yardeni lays out the bull case for a “Roaring 2020s” scenario that could propel the S&P 500 to 6,000 by 2025 in a recent blog post. Yardeni says that if the S&P 500 can reach 5,400 in 2024, then the rally will continue beyond that and reach 6,000 a year later. 

Bullish Prediction: If Yardeni’s bullish prediction comes true, it would translate to an approximate 30% rise from the S&P 500's price as of Monday to the projected 6,000 mark. This would mean that the S&P 500 would have to increase by 15% on average over the next two years, higher than its historical average of around 10% a year. 

Quoted: “We are now raising our yearend 2025 target to 6000 assuming 2026 earnings at $300 per share and a forward P/E of 20,” Yardeni said. “That's because we are seeing more reasons to believe in our Roaring 2020s scenario.”

The History: From 1920 to 1929, stocks boomed at a rate that had never been seen before. In fact, in the decade, stock prices more than quadrupled, according to PBS. But, the party quickly ended late in 1929, when the stock market abruptly crashed, leading to the Great Depression that would ravish the country for more than a decade. 

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