All year, Deutsche Bank’s David Bianco held the title of most bearish strategist on Wall Street for 2014. With a measly 1,850 year-end target for S&P 500, Bianco was caught behind the curve as the bull market extended its historic 5-year long run.
In a new research note to clients, Bianco cranks up his 2014 and 2015 calls and unveils a big 2016 call. Here’s a summary:
- 2014 S&P 500 target: 2,050 (previously 1,850)
- 2015 S&P 500 target: 2,150 (previously 2,000)
- 2016 S&P 500 target: 2,300
Currently, the median year-end target for the S&P 500 is at 2,000, which puts Bianco on the bullish side.
“We still expect a long lasting economic expansion of moderate growth, which should rival the US record of 10 years with S&P EPS growth averaging 6% until the next recession, on 5% sales growth, flat margins, 1% share shrink,” Bianco wrote. “Despite entering the latter years of a typical expansion and high margins vs. history, we now think the trailing S&P PE should average 17 vs. 16 until elevated recession risk returns.”
Like most strategists, Bianco doesn’t see a market downturn happening with out a recession. This is bullish as most economists are convinced that a U.S. recession is a ways off.
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