Top small-cap analyst DeSanctis raises forecast for Russell 2000
Small-cap stocks may see even more gains in their future after hitting recent highs this week, according to Steven DeSanctis, an equity strategist covering small- and mid-cap companies at Jefferies. DeSanctis increased his year-end 2025 target on the Russell 2000 index to 2,665, implying about an 8% upside from Thursday’s closing price. That would also mean a full-year return for the index of 20.7%, he noted. Thursday was a record-setting day for the index, as it saw its first all-time closing high since November 2021 and scored a new all-time intraday high during the session. Those gains come just a day after the Federal Reserve chose to lower its key interest rate by a quarter percentage point. “We are going with the old adage of ‘Don’t fight the Fed,'” the strategist wrote in a note to clients dated Thursday. “The market finally got the rate cut it was looking for, and lower rates are already priced in,” he also said. DeSanctis added that he is more optimistic about earnings heading into the end of the year. He’s anticipating financial results will come in above consensus, projecting growth of 5.5% during the period compared with the Street’s forecast of 3.3%. With that, he picked several small- and mid-cap names that have positive earnings and saw no cuts to estimates over the past month, among other factors. Those include agricultural machinery manufacturer AGCO , which has risen nearly 17% this year, and others such as Boyd Gaming , which has climbed more than 14% during that period. While the Russell was lower in trading Friday, it touched a fresh all-time high earlier in the session and its year-to-date gain stands at more than 10%. It has also risen nearly 18% over the past six months, outpacing the S & P 500’s advance of about 17%. .RUT 6M mountain Russell 2000, 6-month DeSanctis has been covering small caps on Wall Street for roughly three decades. Back in 2010, he ranked in the top spot in the small companies category in Institutional Investor for three straight years.
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