Fundstrat’s Tom Lee Says Earnings Growth, Dollar Weakness Primed To Drive Stocks Higher – Here’s His Target
Fundstrat’s Tom Lee says accelerating earnings development and a weaker US greenback may assist push equities larger by year-end, whilst traders stay cautious amid compressed valuations.
In a brand new interview with CNBC, Lee says enhancing fundamentals are usually not but absolutely mirrored in inventory costs, creating room for upside regardless of potential volatility alongside the best way.
“I feel one of many huge actual tales this yr is earnings development is accelerating, and that was due to onshoring and the tariff headwinds disappearing. However now, if we’ve got greenback weak spot, I feel it places extra upside to the earnings story.”
Lee says present market multiples recommend traders are usually not paying for that enchancment but.
“Traders aren’t essentially paying for that proper now as a result of multiples have been compressing, however I feel it actually helps anchor shares. Between now and the tip of the yr, I feel there may be numerous causes for velocity bumps. However as we exit the yr, the earnings story is anchoring upside to our 7,700 goal.”
From a sector standpoint, Lee says Fundstrat continues to favor cyclical publicity.
“From Fundstrat’s perspective, our prime sector picks this yr can be vitality and fundamental supplies. We nonetheless just like the Magazine 7, and financials, and industrials, and small caps.”
Lee acknowledges policy-related strain on banks however says fundamentals stay sturdy.
“I feel the financials are being buffeted as a result of the White Home is selecting winners and losers. However the financial institution fundamentals are so good.”
Lee provides that rising applied sciences may drive a longer-term revaluation of the sector.
“I feel tokenization and blockchain are actually huge productiveness drivers, and AI is a large tailwind. I’d use any of the weak spot to purchase them.”
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