We’ve seen months of successively more dire Eurozone headlines. But guess what? The United States is going to do just fine. In a note out this morning, Jonathan Golub’s UBS equity research team raised its 2012 and 2013 EPS targets for the S&P 500 to $105 and $113 respectively.
According to Golub, we’ve been hearing about Europe forever, but the outlook hasn’t changed meaningfully since February, an expectation of a recession has been baked in for months.
UBS also believes that recent data point to a moderate expansion in the United States
From the note:
For instance, the Manufacturing and Non-Manufacturing ISM came in at 54.8 and 53.5 in April, respectively. According to ISM, this is consistent with 4.1% GDP growth. Recent trends in retail sales, loan demand, and weekly claims further support this case.
A high baseline for growth from Q1, US expansion, and minimal impact from Europe point to a positive year of earnings.