From Investing.com: 2024-11-18 04:33:13

Morgan Stanley raises S&P 500 price target to 6,500, projecting 11% upside potential. The new target is based on a 21.5x P/E multiple on projected 2026 EPS of $303. Anticipates mid-single-digit revenue growth and margin expansion, with EPS growth forecasts of 13% for 2025 and 12% for 2026.

Strategists expect broadening earnings growth in 2025, driven by Fed rate cuts and post-election rise in corporate “animal spirits.” Base case scenario predicts modest market multiple depreciation. S&P 500 median stock multiple at 19.0x, less extended and should remain supported with anticipated earnings recovery in 2025.

Morgan Stanley sets S&P 500 targets of 7,400 in bull case and 4,600 in bear case. Recommends staying long on quality cyclicals due to expected Fed rate cuts and stabilizing macroeconomic trends. Top overweight sector remains Technology. Favors Software over Semiconductors within the sector.

Maintains underweight position on Consumer Discretionary Goods and Consumer Staples. Neutral stance on small-cap versus large-cap stocks, citing negative correlation with interest rates and weaker earnings revisions in small-cap space. Market sentiment expected to improve following US election, benefiting quality cyclicals.



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