2011 Strategist Targets

Almost uniform agreement by the strategist community that 2011 is a “must win” year. The easy route each year is just to throw on another 8-11% of earnings growth, and commensurate stock growth and this appears to be most are going. Many also are targeting S&P 500 profits at peak levels (or higher) of low to mid $90s – and expect some PE multiple expansion.

For example, S&P earnings end 2011 of $92 x 14 PE ratio = 1288. This falls in the range the bottom half of the analysts are figuring for 2011, whereas the aggressive players are talking 1400 to 1550. Either earnings would need to explode towards $100+ or multiple expansion would be required. For a relatively slow growth country, heavily based on financial earnings, it is hard to make that argument but in a low interest rate environment some will claim 15-16x PE ratios are fair.

As always take these with a grain of salt, coming off record profits in 2007 what this sort of chart predicted for 2008 would be laughable in retrospect.

hat tip Bespoke

About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

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