Merrill Lynch Raises 2013 Target to 1,750 for S&P 500

Bank of America Merrill Lynch is calling for additional upside for the S&P 500 Index. The firm’s new price target for 2013 is 1,750 versus a prior target of only 1,600. While the 1,600 level is lower than the current handles around 1,680, it is actually well above where the S&P 500 closed out 2012 at 1,426.19. Today’s stock market upgrade is from the Merrill Lynch Macro/Investment Strategies team. It is remaining bullish on stocks with an expectation for modest upside from current levels.

The report is “attributable to expected earnings growth, contrasting with returns so far this year driven by multiple expansion. Our revised ERP of 475bp still conservatively assumes elevated risk versus average pre-crisis levels. We now also use our multi-signal target model framework to determine a 12- month target that provides increased visibility on our market outlook beyond the current year. We have modified our earnings estimate revision model: previously we focused on four distinct phases, but we have found superior predictive power with a binary signal. The S&P 500’s 14% return in the first half of the year is the 20th-best start to a year, going back to 1929.”

A level of 1.750 sounds like good upside for the second half of 2013. If it makes you think all of the easy money has been made there is another call for you to consider…

Jay Lefkowicz of Concept Capital in New York is now calling for what would become a secular bull market. His upside target is based upon Fibonacci numbers, and that would take the S&P 500 up to a new much higher high of 2,584.