Goldman Sachs raised its year-end price target for the benchmark S&P 500 to 4,500 from its prior view of 4,000, citing a broadening of the year-to-date rally that has been led by only a few mega cap stocks.

Goldman's chief U.S. equity strategist David Kostin said in a note to clients Friday the firm's 2023 earnings per share forecast for the S&P 500 of $224 remains unchanged and assumes a soft landing for the U.S. economy, as the economics team projects only a 25% probability of a recession over the next 12 months.

While the current price-to-earnings ratio of 19 is "greater than we expected, led by a few mega cap stocks," Kostin said the "combination of slowing inflation, healthy growth and elevated market concentration indicated the current multiple may persist."

Kostin cites an unexpected downturn in growth and stubborn inflation that causes a hawkish pivot from the Federal Reserve, which is widely expected to hold rates steady at its policy meeting this week.