Wells Fargo Investment Institute on Tuesday upped its year-end S&P 500 price target to a range of 2,300 to 2,400, up from its prior range of 2,230 to 2,330, CNBC reports.
The bank's increase its predicated on robust overseas growth and second-quarter earnings.
"Earlier this year, we had concerns that investors might fret over potential for a 2018 pickup in inflation and interest rates," Paul Christopher, Wells Fargo's head global market strategist wrote. "But our new (and more moderate) inflation expectations imply less S&P 500 index downside than we previously had anticipated."
Wells now expects S&P 500 earnings per share at $129, inferring a 17.83 to 18.60 price-to-earnings ratio.
"We expect faster economic growth and low inflation in the second half to support continuing S&P 500 Index earnings growth," Christoper added, citing strong earnings results in the second-quarter. But, "small-cap valuations remain stretched versus historical levels ... We recommend investors remain evenweight mid caps and underweight small caps."
The median year-end S&P 500 target among Wall Street banks is about 2,430, with Morgan Stanley's (MS) 2,700 outlook the highest and Fundstrat's 2,275 estimate the lowest, according to CNBC.
More of What's Trending on TheStreet:
- This Is Where McDonald's Is Closing a Lot of Restaurants
- Panera Bread's Founder Reveals Why Chain Is Putting Sugar Counts on Soda Cups
- Walmart Is Pulling Off a Surprising Feat in This Major Country
- Fort Knox Has a Mind-Blowing Amount of Gold Currently Hidden In Its Vaults