After publishing an extremely controversial bullish note at Bank of America last September, equity strategist David Bianco disappeared for a few months.In February, Business Insider was the first to report that Bianco was hired by Deutsche Bank to be its top U.S. equity strategist.
And today, he’s out with his first note. Here’s a quick summary:
S&P 500 12-month target: 1500, or about 14x both trailing and forward EPS: Our target assumes 2012 US GDP growth of 2.7% and decent but not strong global growth of 3.5% owing to a slower China and a stalled Europe. S&P 500 EPS growth will slow, but decent US growth and fading European sovereign crisis risk should boost the PE. Our S&P 500 yearend target is 1475, below our intrinsic value estimate of 1550 owing to still elevated downside tail risk.
Here’s how he thinks we get to 1,475:
We are constructive on the market and foresee good gains into yearend, but we do not think the S&P 500 will appreciate more than 5% from today’s price until US elections. The “next 5%+” move is more likely down than up. A 5-10% dip in summer is likely on a global growth or politically induced US fiscal scare.
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