The stock market’s stomach-churning roller coaster will keep running, but unlike last year’s flat finish, Wall Street experts anticipate stocks will end 2012 on a high note.
Investment strategists and money managers expect the S&P 500 will rise 7%, on average, in 2012, according to an exclusive CNNMoney survey. While that’s nothing to rejoice about, it’s an improvement from last year’s 0.003% decline — the smallest year-over-year change in the broad index in history.
OR Morgan Stanley’s Projections
We are establishing a 2012 year-end price target of 1167, representing 7% downside from today’s price. The consensus top-down view has coalesced, with limited variation, around 1350, making our forecast 13% more conservative than the “muddle through” scenario implied by consensus.
While 2011 was about multiple contraction, and further contraction is likely, we think 2012 and 2013 are likely more about earnings than the multiple. We are posting a 2013 EPS estimate for the S&P500 of $103.1, 15% below the consensus bottom-up view of$121.1. We have modestly lowered our 2012 earnings forecast, from $103 to $100. We are most below the bottom-up 2012 forecasts in materials, financials, and technology. In 2013, most sectors appear to have estimates more than 10% too high. Of note, BAC is forecasted by analysts to drive 14% of the entire S&P500 EPS growth for 2012 vs. 2011.