Wall Street sees even more gains ahead: CNBC Market Strategist Survey

Traders celebrate on the main trading floor of the New York Stock Exchange (NYSE) as the Dow Jones Industrial Average passes the 20,000 mark shortly after the opening of the trading session in New York, U.S., January 25, 2017.
Brendan McDermid | Reuters
Traders celebrate on the main trading floor of the New York Stock Exchange (NYSE) as the Dow Jones Industrial Average passes the 20,000 mark shortly after the opening of the trading session in New York, U.S., January 25, 2017.

Top strategists have gotten more optimistic on stocks, just as the S&P 500 has pulled back slightly from records, according to CNBC's latest Market Strategist Survey.

Since the last survey in early February, four of 16 market strategists CNBC surveyed in the last three days raised their S&P 500 targets for the year-end or next 12 months. This Tuesday, Barclays' Keith Parker also initiated a year-end forecast at the high end of the range — 2,525 — citing market expectations on the likelihood of tax reform.

The highest target remains Deutsche Bank's Binky Chadha's 2,600 forecast, while formerly bullish Tom Lee at Fundstrat still has the lowest target at 2,275. Right in the middle is Citi's Tobias Levkovich with a 2,425 estimate, just over 3.3 percent above Thursday's close of 2,345.96.

Raises since February:

  • Credit Suisse raised its forecast on Monday from 2,300 to 2,500. Strategist Andrew Garthwaite said in a note while stocks "remain the least expensive major asset class" and are more attractive than bonds, fund flows into stocks remain "below 2013 peak levels." He also expects increased earnings per share growth.

  • Canaccord Genuity raised its forecast on March 13 from 2,340 to 2,470. "Sentiment at the corporate level has dramatically improved following the Democrat loss. Period," strategist Tony Dwyer said in a note. He added, "We believe this emerging enthusiasm was not in anticipation of big tax legislation or regulatory reform, but was more acknowledging there would be no further increased regulation or taxes."

  • CFRA increased its 12-month target from 2,335 to 2,460 on March 2. The firm's chief investment strategist, Sam Stovall, pointed to better earnings and a historical trend: "Since 1945, when the S&P 500 rose in both Jan/Feb, the S&P 500 recorded a positive full-year total return 27 times, averaging 24 percent."

    The index rose nearly 1.8 percent in January and 3.7 percent in February, but is about half a percent lower for March.

  • Bank of America Merrill Lynch raised its forecast on March 1 from 2,300 to 2,450. Strategist Savita Subramanian said investors are getting overly optimistic, which will send stocks higher regardless of actual economic reports or company earnings. But the high optimism also means the market is nearing the end of its years-long rally, she said.

* Middle of a 2,230 - 2,330 range
**12-month target
***Middle of a 2,300 - 2,400 range

The S&P 500 remains about 2 percent below its record hit on March 1, and is up 5 percent for the quarter, tracking for its sixth straight quarter of gains.

"I think the market will be more patient than people think" in waiting for policies like tax reform, Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management, told CNBC.

"I think the word used for markets this year will be 'resilient,'" he said. His year-end target is a range of 2,300 to 2,400.

In the last several months, several major Wall Street strategists have changed positions. As a result, Morgan Stanley was unavailable to provide a year-end target for this survey.