There's No Reason to Raise S&P 500 Target: Morgan Stanley's Wilson

As a flurry of Wall Street forecasters bump up their optimism toward U.S. stocks in lockstep, Morgan Stanley’s Mike Wilson won’t budge, arguing he sees no justification to upgrade his outlook given an absence of broad earnings growth.

The strategist stuck to his year-end S&P 500 Index forecast of 4,500 in an interview on Tuesday with Bloomberg Surveillance Radio, even as a growing list of peers at firms including Bank of America Corp., Goldman Sachs Group Inc., and UBS Group AG have raised projections for the benchmark.

Wilson’s call is roughly 12% below the S&P 500’s closing level Monday of around 5,118, and 8% short of the average year-end call of Wall Street strategists tracked by Bloomberg, of 4,915. Among the big banks, only JPMorgan Chase & Co. has a lower 2024 forecast than Wilson’s.

“A lot of folks have raised their price targets because of higher multiples,” Wilson said. “We’re not willing to do that.”

His skepticism comes in the face of a sharp rally in U.S. stocks since October. The S&P 500 gained in 16 of the past 19 weeks amid enthusiasm around corporate earnings, artificial intelligence and economic strength.

The index resumed its climb Tuesday after declining the past two sessions. The day’s advance followed a hotter-than-forecast inflation reading that left intact expectations for at least three Federal Reserve interest-rate cuts by year-end.