Jul. 28 at 12:52 PM
$SPX $ROK $ETN $TT Morgan Stanley’s Wilson Sees S&P 500 at 7,200 in 2026
Morgan Stanley’s Mike Wilson now leans toward his bull case for the SPX, forecasting 7,200 in 12 months, based on
$319 EPS and a 22.5x forward P/E. The outlook is driven by resilient earnings, AI adoption, Trump’s tax bill, and pent-up demand across sectors.
Wilson highlights improved earnings breadth, positive operating leverage from slowing wage growth, and a high likelihood of Fed rate cuts in early 2026 as key tailwinds. His regime analysis suggests multiple expansion occurs 90% of the time under current macro conditions.
Despite near-term risks — including high Treasury yields, tariffs, and seasonal headwinds — Wilson expects only shallow pullbacks and remains a buyer on dips.
Favored sector: Industrials — led by ROK, ETN, TT, JCI — due to strong earnings revisions, stable capacity utilization, and record-high commercial loans.
