Wall Street\’s leading bearish analyst throws in the towel and raises S&P 500 price target

One of Wall Street\’s most prominent bear analysts has changed his stance on the outlook for U.S. stocks. Morgan Stanley chief U.S. equity strategist Michael Wilson now expects the S&P 500 to rise 2% by June 2025; he had previously seen the S&P falling 15% by December.

One of Wall Street\’s most prominent bear analysts has changed his stance on the outlook for U.S. stocks.
Morgan Stanley chief U.S. equity strategist Michael Wilson now expects the S&P 500 to rise 2% by June 2025; he previously thought the S&P would fall 15% by December.
The strategist ultimately threw in the towel and raised his price target on the S&P 500 to 5,400 from 4,500 as U.S. stocks continued to rise and his downbeat forecast for 2023 failed to materialize.
That took his prediction from one of the lowest on Wall Street to one that would set a new record.
He wrote in a report on Sunday (19th): \”In the U.S. we expect strong earnings per share growth and moderate price-to-earnings compression.
Morgan Stanley discussed its views on various assets in the second half of the year.
Wilson has repeatedly stuck to his 4,500 target for the S&P 500 in recent months even as the broader market index has hit record highs.
He said in March there was no reason to raise the target due to a general lack of growth in corporate profits.
He said last month he would avoid making major predictions about the index\’s direction due to growing economic uncertainty.
Overall, Morgan Stanley expects a \”clear macro environment\” to support risk assets in the second half of the year.
But Wilson reiterated that economic outcomes are becoming harder to predict as data become more volatile and comprehensive.
That leaves JPMorgan strategist Dubravko Lakos-Bujas among a handful of short analysts on Wall Street after Wilson raised his forecast for the S&P 500.
He expects the S&P 500 to be down more than 20% by the end of the year.
Deutsche Bank strategists also raised their target price for the S&P 500 Index at the end of 2024 to 5,500 points from 5,100 points on Friday (17th).
Wilson recommends taking a leveraged approach to high-quality cyclical stocks and high-quality growth stocks and maintaining long positions in certain defensive stocks such as consumer staples and utilities.

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