Goldman Sachs lifted its year-end target on the S & P 500 and sees market laggards playing catch up with this year’s leaders. The Wall Street firm boosted its 2023 forecast for the S & P 500 to 4,500, which represents about 5% upside from current levels and is a 12.5% increase from Goldman’s previous target of 4,000. The market strength so far this year has come from mega-cap tech stocks and beneficiaries of the artificial intelligence boom, but Goldman said the rally will eventually broaden to select cyclical names that have lagged the market averages. “[P]rior episodes of sharply narrowing breadth have been followed by a ‘catch-up’ from a broader valuation re-rating,” David Kostin, Goldman’s chief U.S. equity strategist, said in a note. “The potential profit boost from AI has expanded the right tail for equities, while left tail risks from recession and hawkish Fed policy remain.” Signs of such a shift have recently emerged as cyclical stocks have outperformed their defensive counterparts lately, but plenty of cyclicals have missed out, Goldman said. To find opportunities among the laggards, Goldman screened the Russell 3000 Index, looking for cyclical stocks with market caps greater than $2 billion. It found a list of names with valuations below the S & P 500 and improving fundamentals, demonstrated by improved 2024 earnings revisions. The list included insurance names American Equity Investment Life , CNO Financial Group , Everest Re Group and RenaissanceRe Holdings . Gold miner Newmont and steel company Cleveland-Cliffs are also on the list.