Strategists Keep 2009 S&P 500 Price Target at 949 - Just 4% Away

The Wall Street strategists that Bloomberg polls each week haven't changed their year-end S&P 500 price targets since mid-March. But by doing nothing, their collective price target has gotten much closer to the actual level of the index since the market has rallied so much.

At the start of the year, strategists as a whole were looking for a year-end S&P 500 price of 1,049, which would have meant a gain of 16.2% for the year. When the market was down more than 20% in early March, this bullish price target was pretty bad. As the market fell, strategists cut their year-end target, which is now 100 points lower at 949. But as the market has risen, they haven't increased their expectations yet, so they are now just looking for another 4.19% gain through the end of the year.

UBS and JP Morgan remain the most bullish of the bunch with a target of 1,100. And four strategists have price targets below the current level of the S&P 500, with Barclays the most bearish at 757. At the start of the year, Barclays was looking for 874.

Comments

[Macro_Man:]

Prediction: When S&P crosses 1000 in later summer/fall, all of these clowns will be busy revising their estimates upward. That will be the time to sell....I think S&P ends the year much lower than where we are today. But, we go higher over next few months first.

May 19 02:40 PM

[Fighting Yoda:]

It is a overbought delusional market. Who knows where it will go in the near future, but would be siginficantly down by end of year - 600 would be my prediction.

May 19 03:58 PM

[Larry House:]

Sounds about right to me, Macro_Man. I don't think we are going to go much higher from here but some, and that will be the high for the year. I plan to be out of stocks this summer for probably the rest of the year.

May 19 04:00 PM

[Prudent Man...:]

So what. We have had big moves since this recession started in early 2007. Where were the so-called "Strategist (I always thought that this is a job where you puts some rich guys kid who had an MBA from Harvard but couldn't do anything) then?

As for those people who say they want to pay back TARP but Uncle Sap won't let them; put in an escrow account and I will believed you P.R. bull.

Until we get serious about our economic problems the market can do whatever it wants but without me. After all, until the BHO got all the money they wanted we were in a crisis. Once the got the dough everything looks great in the eyes of the blind, Socialist in the Fed, Treasury and BHO Administration. It took a week for a turnaround and solution of problems that have festered for decades. Switching debt from private to public is hardly a solution.

May 19 04:10 PM

[RiskReturnO...:]

Unless there is huge profit recovery (very unlikely, given the stake of US consumers), it's hard for SPY to trade much higher than 900.

Based on Q1 results, here are likely SPY EPS for 2009:
Q1 = $11
Q2 = $12
Q3 = $13
Q4 = $14

By YE 2009, run rate of SPY EPS will be around $56. Applying a 15 PE multiple, SPY would be around $840. Assuming inflation stays low, a 17 PE multiple can give us SPY of around $950.

Best strategy is to use aggressive covered call writing strategy at SPY = 900; keep buying each dip with more covered calls at these levels:

SPY = 840 (33% retracement of March to May rally);
SPY = 800 (50% retracemnt of March to May rally).

May 19 04:14 PM

[chrave1956:]

Prediction: At year end, S&P 500 Index will definitely be either Higher or Lower than we are today..or about the same as it is today.

May 19 08:37 PM

[Donkey Kong:]

Market strategists are just like all sellside analysts. They raise their price targets as the market (company's stock price) goes up and get them when they go down. Definitely a lagging indicator and not very useful. My prediction for year-end 2009 is unchanged at +10% to - 10% on the SPX with lot's sharp swings throughout the year.

May 19 08:42 PM

[I am NOT Ned!!:]

Cetin - A Haiku:

Capitulation!
Never ever in my mind!
Bull is my best friend.

Yep, you got it...that last line is up for interpretation.


On May 19 05:33 PM Cetin Hakimoglu wrote:

> We should end the year at 1150-1250. There is still overwhelming
> pessimism on the short side.; much more capitulation.

May 20 12:21 AM

[Henrique Si...:]

I will also give my call for the S&P.

It will end the year at 850.

May 21 05:59 AM