Goldman Sachs raises S&P 500 target to 8,000, names 5 top dividend picks

Goldman Sachs raised its S&P 500 year-end target to 8,000 and highlighted five dividend stocks from its Conviction List for passive income.

"Continued earnings growth should drive further upside in the equity market," Goldman Sachs strategists said in a note published June 5. "We expect the S&P 500 to rise by 6% to our revised year-end target of 8,000."

The bank boosted its S&P 500 earnings per share forecasts to $340 for 2026, representing 24% year-over-year growth, and $385 for 2027. Beneficiaries of AI infrastructure investment will account for roughly half of this year's EPS growth, the firm said. The previous target stood at 7,600.

The five Conviction List picks offer dividend yields ranging from 2.82% to 3.95%, with implied upside of 10% to 33% based on Goldman Sachs price targets. The recommendations come as the S&P 500 trades near all-time highs and the Vanguard S&P 500 ETF surpassed $1 trillion in assets under management on June 2.

Ares Management (NYSE: ARES), an alternative investment manager with operations across North America, Europe, Asia Pacific, South America and the Middle East, pays a 3.67% dividend. Goldman Sachs set a $138 price target, implying 10% upside. The firm manages credit, private equity, real assets and secondaries strategies.

Brixmor Property (NYSE: BRX), an internally managed real estate investment trust, offers a 3.95% dividend yield — the highest among the five picks. The company owns and operates roughly 360 open-air retail centers totaling more than 64 million square feet across the United States. Goldman Sachs has a $35 target, representing 12% upside.

Citizens Financial (NYSE: CFG), founded in 1828, pays a 2.82% dividend. The bank holding company provides retail and commercial banking products across consumer and commercial segments. Goldman Sachs set a $77 price target, implying 21% upside.

Duke Energy (NYSE: DUK), an electric power and natural gas holding company based in Charlotte, North Carolina, pays a 3.50% dividend. The utility generates electricity using coal, natural gas, nuclear, hydroelectric, solar and wind sources across the Carolinas, Florida and the Midwest. Goldman Sachs has a $145 target, representing 16% upside.

Kontoor Brands (NYSE: KTB), a global lifestyle apparel company behind the Wrangler, Lee and Helly Hansen brands, pays a 3.08% dividend. Goldman Sachs set a $95 price target, implying 33% upside — the largest potential gain among the five picks.

Goldman Sachs Chief Executive Officer David Solomon said investors are in "greed mode" as markets prepare for a wave of high-profile initial public offerings from artificial intelligence firms including OpenAI, Anthropic and SpaceX. "There's plenty of liquidity in the system if the world continues to remain as optimistic," Solomon told CNBC on June 3.

The Conviction List is a curated set of stocks where Goldman Sachs analysts have the highest confidence in outperformance, reviewed and updated monthly. The five dividend picks offer a blend of income and capital appreciation potential as the bank projects the S&P 500 to reach new highs by year-end. Investors will watch upcoming earnings seasons for confirmation of the earnings growth trajectory that underpins the 8,000 target.

This article is for informational purposes only and does not constitute investment advice.