Citigroup sees S&P hitting 1,500 by end of 2007 (Who slipped the hallucinogens into the office coffee pot?)

Citigroup Inc. set 2007 year-end targets of 1,500 for the Standard & Poor's 500 index (that's 14.3% over 15 monnths) and 12,750 for the Dow Jones industrial average, with the cash on corporate balance sheets providing some downside protection.

In a research note, analyst Tobias Levkovich forecast another year of high-single-digit gains. The risk of a decline in the S&P 500 index was modest given that at S&P 500 companies, excluding financial firms, cash holdings are about 8 percent of market capitalization.

Citigroup said that after weighing several factors, it predicted the S&P would range between 1,400 on the low end and 1,630 on the high end as 2007 comes to a close.

Given the current yield curve, this strikes us as somewhat overly optimistic. Which brings us back to our original question. Who put what in the coffee? Or has someone been hitting the old bong?

http://www.crossingwallstreet.com/