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Wells Fargo's famous bear is now a bull—here's why

Gina Martin Adams of Wells Fargo has long been known as the most bearish strategist on Wall Street. After all, at 1,850, she had the lowest year-end S&P target among major strategists. But on Tuesday, she got rid of that year-end target and initiated at 12-month target of 2,100, reflecting a mildly bullish outlook.

"We've thought for most of this year that we'd have a bit of a trade-off for stocks—earnings growth improving, but the timeline is shrinking for this very accomodative Fed policy environment," Adams said Tuesday on CNBC's "Futures Now."

"We think that's still intact, but quite frankly, earnings have started to take over," meaning that any volatility that accompanies Federal Reserve tightening will serve as a buying opportunity.

She isn't the first strategist to change her stripes. Adams' 1,850 target (which at the beginning of the year merely predicted a flat market, but has become more bearish as the market has risen 8 percent) was shared by David Bianco at Deutsche Bank and Barry Bannister at Stifel Nicolaus. But both have recently increased their calls—to 2,050 in Bianco's case, and 2,300 in Bannister's.

That fresh price target now makes Bannister the Street's most bullish analyst for 2014. (Although it's worth noting Tony Dwyer of Canaccord Genuity, previously the Street's biggest bull, did reduce that gap on Tuesday by raising his year-end target from 2,185 to 2,230.)

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For her part, Adams no longer has a year-end target. Instead, because she believes that a short-term drop is likely but that the dip will be a buy, she is simply targeting a move 5 percent higher to 2,100 within one year's time.

Statues of a bear and a bull stand outside the Frankfurt Stock Exchange.
Hannelore Foerster | Bloomberg | Getty Images
Statues of a bear and a bull stand outside the Frankfurt Stock Exchange.

This target shift may finally allow Adams to shake the "bear" label. While 1,850 has only become a bearish target over the course of the year, the same thing happened to her in 2013, when her year-end target of 1,440 began to look mega-bearish as the market screamed higher (even drawing a Wall Street Journal article that implied that Adams' call was leading to serious negative attention within Wells Fargo).

On Tuesday, she made it clear that she considers the label a misnomer.

Rather than being bearish, "we've just been a little bit less optimistic than the Street as a whole," Adams said. "I think it's interesting that I've been characterized as a bear all year, quite frankly, because we've had a very neutral outlook for stocks. I think that by dropping the end-of-year price target and sort of now focusing on a 12-month target, we can add a lot more context to our calls."

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Still, she insists that this call is not about guiding public perceptions about her views.

"It's not really about what I want to be relative to the Street. It's about putting some context around a 12-month call for the stock market," she said emphatically.

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At this point, Adams might best be characterized as a measured bull—still anxious about the potential short-term implications of Federal Reserve tightening, but with an overall positive outlook on the economy and corporate results.

"I think that we can get a little bit more optimistic as long as we get through this policy tightening environment without any damage to economic growth," she said. "It could get tough here in the short run, but over the long run, we think it's a buying opportunity because we do see some signs of life in the revenue stream for the first time in nearly three years."

—By Alex Rosenberg, with reporting contributed by Kate Gibson.

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