Wall Street’s favorite stock sector has potential upside of 43% as we enter the second half of 2022

At the midpoint of 2022, investors are looking at a remarkable change in stock valuations.

The S&P 500
SPX,
-0.07%
has declined 20%, but the benchmark index’s forward price-to-earnings valuation has fallen by 24% because future earnings estimates have continued to increase. In other words, the S&P 500 has gotten cheaper.