Despite recent volatility, Wall Street investment bank Morgan Stanley (MS) remains bullish on U.S. equities.
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In fact, Morgan Stanley is so positive on stocks that it has raised its year-end target for the benchmark S&P 500 stock market index. The New York-based bank hiked its year-end target for the S&P 500 to 8,000 from 7,800 previously.
That’s the second highest forecast on Wall Street. Privately held Yardeni Research has a Street high year-end target on the index of 8,300. The S&P 500 ended trading on May 12 at 7,400.96, its second-highest level ever. The index is up 17% since March 30 of this year as investors look past the Iran war.
Morgan Stanley argues in a note to clients that the stock market isn’t ignoring the risks of the Iran war, but that it’s priced them in.
The bank writes that the market has done “a substantial amount of work to price in the numerous risks that appeared over the past six months—Iran war/oil spike, AI disruption and private credit concerns being the most significant.”
Morgan Stanley adds that oil would have to rise above $130 U.S. to $150 U.S. per barrel and corporate earnings would have to deteriorate significantly to derail the stock rally and its outlook.
MS stock has increased 48% over the past 12 months to trade at $191.88 U.S. per share.