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Morgan Stanley raises S&P 500 12-month forecast

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Morgan Stanley raised its 12-month price target for the to 2,300 from 2,200, noting that U.S. equities remain the best place to be for investors.

"We think the U.S. market is going higher," wrote the firm's chief U.S. equity strategist, Adam Parker, in a note to clients Tuesday, listing four reasons for the bullishness, including the notion that investors are underexposed to equities, a force that can boost the market as they chase performance into year-end.

"Investors aren't positioned for big upside — whether you look at futures, options, prime brokerage data, surveys, or anecdotally from meetings, we don't see excessive optimism among the client base," wrote Parker.

The new price target by Morgan Stanley implies a gain of 5.6 percent from Friday's close, and places the investment bank among the most bullish firms on the Street.