In a surprising turn of events, Morgan Stanley’s top stock strategist, Mike Wilson, has abandoned his bearish stance on the stock market and is now bullish on the future. Wilson, who has been bearish for years, recently increased his S&P 500 price target by a significant 20% to 5,400 in a note released on Sunday.
Wilson’s change in outlook comes after correctly predicting the decline in the stock market in 2022 but struggling to embrace the rally that followed throughout 2023. His new bullish forecast suggests potential record highs for the S&P 500, with a 2% upside from current levels.
“Our 2024 and 2025 earnings growth forecasts assume healthy, mid-single-digit top-line growth in addition to margin expansion as positive operating leverage resumes,” Wilson explained.
Furthermore, Wilson outlined a bull case scenario where the stock market could surge an additional 20% to 6,350 on the S&P 500. This optimistic projection is driven by stronger earnings per share growth and multiple expansion, fueled by continued fiscal support and cyclical/structural drivers out to 2026.
Wilson’s shift from bearish to bullish on US stocks marks a significant change in sentiment and leaves JPMorgan’s Dubravko Lakos-Bujas and Marko Kolanovic as some of the few remaining bears on Wall Street. JPMorgan maintains a year-end price target of 4,200 for the S&P 500, representing potential downside of 21% from current levels.
With Wilson’s newfound optimism, investors will be closely watching how the stock market responds to his revised outlook and whether his bullish predictions will come to fruition in the coming months.
