Wall Street spent most of 2025 convinced that Federal Reserve rate cuts were the unlock for the next leg of the stock market rally. That thesis did not play out the way most strategists expected.
On June 30, Wells Fargo put a number on what the market has actually been running on instead.
Wells Fargo Chief Equity Strategist Ohsung Kwon published a call on June 30 that tells a specific story about what moves equity markets higher. The details behind the bank's revision are more instructive than the headline target.
Banks raise their S&P 500 targets two ways. They can ****** ume investors will pay a higher multiple for the same earnings, or they can raise their earnings estimates and let the math produce a higher target.
Wells Fargo did the second, as TheStreet reported. The firm lifted its year-end target to 7,950 from 7,007, a jump of nearly 14%, but the earnings multiple barely moved, going from 23.2x to 23.4x. The whole move came from higher profit estimates.
On June 30, Wells Fargo put a number on what the market has actually been running on instead.
Wells Fargo Chief Equity Strategist Ohsung Kwon published a call on June 30 that tells a specific story about what moves equity markets higher. The details behind the bank's revision are more instructive than the headline target.
Banks raise their S&P 500 targets two ways. They can ****** ume investors will pay a higher multiple for the same earnings, or they can raise their earnings estimates and let the math produce a higher target.
Wells Fargo did the second, as TheStreet reported. The firm lifted its year-end target to 7,950 from 7,007, a jump of nearly 14%, but the earnings multiple barely moved, going from 23.2x to 23.4x. The whole move came from higher profit estimates.
1 month ago
