Barclays’ Jonathan Glionna falls into that latter camp.
With this in mind, Glionna offers his 2015 year-end target for the S&P 500: 2,100.
That’s a meager 1.4% gain from today’s 2,070 level.
From his Nov. 20 note:
“We believe US equities are transitioning out of a recovery rally and into a period of lower returns as the benefits of margin expansion and share repurchases prove to be already priced in and a return of faster revenue growth becomes a prerequisite for another re-rating higher. We forecast the S&P 500 to reach 2100 by the end of 2015. We expect faster earnings growth outside the US in 2015 and, with lower valuations and a looser policy stance, we prefer “international” stocks over US stocks. One of the reasons this strategy did not work in 2014 was the heavy positioning toward overseas markets established during 2013 and early 2014. This appears much less extreme now and therefore likely to be less of a constraint on our view in 2015.”
He expects 4.0% year-over-year revenue growth, which he expects to drive an 8% increase in earnings per share.
Barclays global equity strategy team recommends being underweight US stocks relative to non-US stocks due to valuation.
“[G]lobal equity markets are likely to have to cope with a turn in the US monetary policy cycle during 2015,” he wrote. “Although we doubt that a rise in the Fed Funds rate will have a prolonged damaging effect on the US market, it will likely prove a headwind relative to the looseness of policy elsewhere.”
For some context, here’s a roundup of some other 2015 forecasts we’ve seen:
Credit Suisse’s Andrew Garthwaite: 2,100
Goldman Sachs’ David Kostin: 2,100
Citi’s Tobias Levkovich: 2,200
UBS’s Julian Emanuel: 2,225
Oppenheimer’s John Stoltzfus: 2,311