Strong earnings throughout the rest of the year should lift the S&P 500 more than UBS expected.
The Wall Street firm raised its year-end price target for the S&P 500 to 4,400 from 4,250, implying a gain of more than 5% from its current level of 4,173.85. The benchmark is up 11% so far on the year.
“Significant upside to earnings should more than offset the challenges from valuation headwinds,” UBS Chief U.S. Equity Strategist Keith Parker told clients.
For how to play it, UBS likes stocks with pricing power due to inflation risk and a handful of “new momentum” stocks, which have very strong growth and fundamentals.
