Morgan Stanley Raises US Target, Moves To Overweight Energy

Array
(
    [0] => Array
        (
        )

    [1] => Array
        (
        )

)

By Rudi Filapek-Vandyck

A recent we story we published on what seemed like ongoing positive prospects for US equities is bound to have raised some eyebrows here and there with Morgan Stanley US strategist Henry H. McVey putting a target of 1,475 on the S&P500 index by end 2007 (see Conditions Remain Favourable For US Equities 24/11/2006).

Surely, with the S&P500 approaching 1400 this had to be some kind of a mistake?

McVey himself provided the answer overnight by reporting he has now increased the target to 1,525. This implies a return of 9% over the 13 months ahead, dividends and possible other extras not included.

Investors may also want to take note of the fact that Morgan Stanley has now made a switch back into Energy, recommending investors attribute the highest sector Overweight balance in their portfolios to the sector. The largest Underweight sector is Consumer Discretionary.

Interestingly, the broker forecasts a total return of 13% for European stocks (MSCI Europe) of which 3% will come from dividends.

Click to view our Glossary of Financial Terms