Wells Fargo’s team of strategists lifted the price target on the S&P 500 to 5535 from the prior 4625 as they hiked their 2025 earnings estimate to $270 and the index being valued at 20.5x earnings. The new price target implies an upside potential of more than 6% compared to Friday's closing price.
Wells Fargo also highlights a potential increase in systemic risk facilitated by current monetary policies promoting risk and leverage.
“We believe equities do have some upside from current levels, but we still anticipate a volatility spike in 1H24,” the report noted.