Strategists at Goldman Sachs on Thursday lifted their S&P 500 targets for both this year and next, citing better-than-expected earnings and lower-than-expected interest rates.

The investment bank lifted its year-end S&P 500
SPX,
-0.46%

target to 4,700 from 4,300 — implying a 7% advance to the end of 2021 — and moved its 2022 target to 4,900 from 4,600.

Strategists led by David Kostin point out that earnings per share growth has accounted for all of the major index’s 17% return this year.

“In the near term, we expect upward revisions to EPS estimates and declining concerns about the delta variant spread to drive equity upside, but the path of the virus and its economic impact have proven difficult to predict,” said the strategists.

Any surprise business or regulatory developments for tech giants Apple
AAPL,
-0.28%
,
Microsoft
MSFT,
-0.21%
,
Amazon
AMZN,
-0.34%
,
Alphabet
GOOGL,
-0.37%

and Facebook
FB,
+2.19%

— 23% of the S&P 500’s market cap — could limit upside, they added.

They also expect a narrower version of President Joe Biden’s proposed tax plan to pass Congress.

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