JPMorgan raises ceiling on Wall Street's year-end forecasts

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Adam Jeffery | CNBC

Wall Street analysts have been turning more bullish on equities even with major indexes near new highs and with the S&P 500 at arm's reach of the 1,700 mark.

Most recently, JPMorgan Chase's chief equity strategist, Thomas Lee, hiked his year-end target on the S&P to 1,775 from 1,715. Lee's new outlook is currently the highest among the top Wall Street firms and translates into a 5 percent upside by year-end.

"This has been a better bull than expected in 2013. … One of the positive takeaways from the second quarter has been better commentary regarding the Europe area," wrote Lee in a research note. "And this adds to the mosaic of generally improving Euro-area economic data points. With both the U.S. and Europe expected to see better growth in the second half, we believe the Street will be in a position to raise 2014 earnings."

(Read more: The key to trading the S&P today: Pro)

Going forward, Lee noted that technology, financials and health care will be the top sector drivers to boost the market.

Since hitting their two-month lows in mid-June, stocks have staged an impressive turnaround in the past four weeks. The Dow added nearly 6 percent, while the S&P rallied more than 7 percent. Earlier this week, both indexes logged fresh closing highs and the S&P came within 2 points of touching the 1,700 mark.

"Stocks are trading at barely 14 times forward earnings, when they should be closer to 16-17 times so there's plenty of reasons to be optimistic about owning stocks here," said Lee in a recent appearance on CNBC. "Putting money to work here should be profitable by year-end."

Other widely followed strategists who have recently pushed year-end targets above 1,700 include Bank of America/Merrill Lynch's Savita Subramanian, who has a current target of 1,750. Analysts at Credit Suisse and Oppenheimer also have current year-end price targets of over 1,700.

(Read more: Is the S&P 500 ready for another pullback?)

But the two biggest risks that could threaten the rally, according to Lee, are China and the Fed.

Meanwhile, Subramanian said while she expects market choppiness ahead, investors should avoid panic selling.

"Markets do not move in straight lines: 5 percent or greater pullbacks have occurred an average of three times per year," she noted. "Trying to time pullbacks can lead to underinvestment and underperformance in an up market. As such, we continue to recommend that investors lengthen their investment time horizons and to use pullbacks as buying opportunities."

(Read more: Rotation or not, investors surge into stock funds) compiled a list of other strategists' year-end targets to date:

Year-End Price Targets

Year-End Price Target
JPMorgan Thomas Lee 1,775
Goldman Sachs David Kostin 1,750* (in 6 months)
Bank of America/Merrill Lynch Savita Subramanian 1,750
Credit Suisse Andrew Garthwaite 1,730
Oppenheimer John Stoltzfus 1,730
Wells Capital Management Jim Paulsen 1,700
Piper Jaffray Craig Johnson 1,700
Wells Fargo Advisors Gary Thayer 1,650-1,700
Deutsche Bank David Bianco 1,675
Citigroup Tobias Levkovich 1,615
Morgan Stanley Adam Parker 1,600
Barclays Barry Knapp 1,525
Wells Fargo Securities Gina Martin Adams 1,440
Source: CNBC

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

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