A familiar pattern is emerging in Wall Street's 2025 stock market targets 📈

Strategists are once again predicting average-ish annual returns 🫳

An AI-generated image of a normal distribution.

A growing number of prominent Wall Street strategists expect the stock market to deliver relatively average returns in 2025.

“We forecast the S&P 500 index will rise to 6,500 by year-end 2025, reflecting an 11% price gain from the current level and 12% total return with dividends,” Goldman Sachs’ David Kostin wrote on Monday. “Our view is predicated on continued U.S. economic expansion, earnings growth of 11% in 2025 and 7% in 2026, and a forward P/E multiple of 21.5x at the end of next year, a 1% compression from the current P/E of 21.7x.”

If 6,500 sounds familiar, that’s because it’s the exact same target as Morgan Stanley’s Michael Wilson. But this isn’t too surprising. Wall Street strategists tend to cluster in their forecasts, and their forecasts tend to imply pretty average returns. It’s a familiar pattern.

“Our projected return would rank in the 46th percentile of the historical distribution of 12-month returns,” Kostin acknowledged.

UBS’s Jonathan Golub is also in this cluster looking for near-average returns. He sees the S&P 500 ending 2025 at 6,400, an 8% gain from recent levels.

“After a rally this year through Trump’s cabinet appointments, we see mild downside in equities in H1 next year amid a step down in US growth,” UBS analysts wrote on Monday. “Once earnings estimates have fallen to more realistic levels, H2 ’25 should be better.”

The S&P 500 is up 24% year to date. This is on top of a 24% rally in 2023. So a high single-digit, low double-digit average-ish return would reflect a significant cooling from the past two years of impressive gains.

“Bull markets can, will, and should slow their pace from time to time, a period of digestion that in turn only accentuates the health of the underlying secular bull,” BMO’s Brian Belski wrote on Monday. He sees the S&P ending 2025 at 6,700, a 13% gain from recent levels.