Insight

2022 S&P 500 Predictions

Every year, Wall Streets’s top strategist make a call of where they think the S&P 500 will finish. We wanted to share a summary of some of these target prices for 2022 and the strategist reasoning for it.

Alex LaRosa, CFP®

Investment Advisor Representative
S&P 500 image

2022 S&P 500 Predictions

Every year, Wall Streets’s top strategist make a call of where they think the S&P 500 will finish. We wanted to share a summary of some of these target prices for 2022 and the strategist reasoning for it. Remember to take these predictions with a grain of salt as markets are hardly predictable no matter how much of an “expert” you are.

Morgan Stanley

Target Price-4,400

2022 performance: -7.7%

While the firm still expects solid EPS growth next year, “uncertainty around that expectation goes up materially given cost pressures, supply issues, along with tax and policy uncertainty that is unique to the U.S.,” the analysts wrote in the note. With the rest of the world having lagged the U.S. recovery, the firm sees more “catch up” potential elsewhere and less earnings volatility over the next 12 months.

While Morgan Stanley does expect earnings for the S&P 500 overall to be solid, chief U.S. equity strategist Michael Wilson expects “significant” earnings dispersion at the stock level, making the year more about stocks than sectors or styles.

 

Wells Fargo

Target Price-5,200

2022 Performance: 9.1%

Persistent supply shortages and inflation pressures lead us to adjust the magnitudes of some 2022 targets, but we believe the global economy should still mark an above-average pace next year. More importantly, our tactical preferences for the next 6 to 18 months are nearly all unchanged.

 

Goldman Sachs

Target price-5,100

2022 Performance: 7%

“Decelerating economic growth, a tightening Fed, and rising real yields suggest investors should expect modestly below-average returns next year.”

“In contrast with our expectation during the past year, corporate tax rates will likely remain unchanged in 2022 and rise in 2023. Corporate earnings will grow and lift share prices. The equity bull market will continue.”

“While we remain vigilant on margins, we don’t think it makes sense to assume the worst on this front given the strong track record that companies have had managing through cost pressures even before the pandemic.”

 

Credit Suisse

Target Price-5200

2022 Performance: 9.1%

“This constructive outlook is based on robust projections for economic growth in both real and nominal terms, further margin upside in cyclical groups, a pickup in buybacks and a favorable discount rate despite Fed tightening.”

 

JP Morgan

Target Price-5,050

2022 Performance: 5.7%

A JPM team led by Dubravko Lakos-Bujas, chief U.S. equity strategist, sees further stock upside ahead, albeit more moderate, on better-than-expected earnings growth, easing supply shocks, improved background on China (which JPM upgraded to overweight on expectations for policy easing and as equity risk premiums from regulatory moves are priced in) and emerging markets, normalizing consumer spending habits and, most important, accommodative central banks.

 

BMO Capital Markets

Target Price-5,300

2022 Performance: 10.97%

The bank believes that investors are too focused on inflation, which should moderate as supply chain kinks get straightened out next year. Combined with solid corporate earnings, that should continue to drive stocks higher in 2022, BMO analysts said. What’s more, the size of the Federal Reserve’s balance sheet “will remain very large for quite some time, which should continue to be supportive of stocks.”

RBC Capital Markets

Target Price-5050

2022 performance: 5.7%

Like JPMorgan, the firm sees a slight gain for stocks in 2022, with heightened concern over rising Covid cases yet to derail the bull market. The new omicron variant is a reason for investors to “proceed with caution but not to panic,” RBC analysts said in a recent note. The firm did admit that there is likely to be more stock market volatility in the near term, especially as omicron could worsen ongoing supply chain issues.

 

UBS

Target Price-4850

2022 Performance: 1.7%

While stocks are “likely to have a pullback at some point,” strong corporate earnings and an eventual decline in Covid cases should help boost the market higher, the firm said.

 

Bank of America

Target Price-4600

2022 Performance: -3.48%

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