Investing.com — Wells Fargo forecasts a positive outlook for the stock in 2025, driven by strong earnings growth and a supportive economic environment.
According to the bank, “picking up economic growth will boost corporate sales, while deregulation, ongoing cost controls and easing credit conditions should support an increase in profit margins in 2025.”
The bank expects share prices to continue to rise. “We expect share prices to continue to rise, driven primarily by earnings growth spreading to cyclically oriented areas of the market,” Wells Fargo (NYSE: ) stated.
The bank’s EPS target at the end of 2025 is $275, with a target price range of $6,500 to $6,700.
The firm notes that the forecast for higher stock prices is consistent with historical patterns during Fed easing cycles.
“Of the four recession-free easing cycles since 1980, the average return of the S&P 500 12 months after the first contraction was over 22%, with the single worst return still an impressive 16%,” Wells Fargo said.
In terms of positioning, Wells Fargo remains focused on quality, favoring US large-cap stocks over mid-cap and small-cap stocks. At the international level, priority is given to the developed markets of the former USA in relation to developing markets.
Sector-wise, Wells Fargo suggests focusing on cyclical and growth-oriented sectors rather than defensive ones.
The bank has the “most favorable” ranking for energy and the “most favorable” ranking for communication services and industry. On the other hand, consumer products and utilities are considered unfavorable.
