UBS Securities LLC has raised its S&P 500 target to 1,450 from 1,400.

“We expect a broad rally by year end. We think industrials, financials, and healthcare are the most attractive sectors. We now see opportunity in tech, but we remain cautious on consumer discretionary,” the firm says in a new report.

The report argues that the current economic slowdown will be mostly confined to consumer areas. It notes that S&P 500 earnings are less exposed to consumers, and it believes they will prove resilient. “Numerous supports have bolstered and should continue to bolster S&P 500 earnings in this consumer led and we believe largely contained slowdown,” it says. These supports include: a healthy global economy, robust infrastructure spending, ongoing efficiency initiatives and moderating input costs, underleveraged balance sheets, and M&A driven consolidation.

UBS says it believes the Fed is done raising rates. “The softer economy and continued investment response will ease inflation pressures over time,” it maintains. “The Fed is showing both vigilance and patience. The era of low long-term interest rates is likely to continue, supporting a high-teens PE on normalized EPS.”

“We consider the S&P 500 undervalued and our best estimate of where it trades in a year is 1,450,” it concludes. “We believe our previous 1,400 target, set in January, can be reached by 2006 year-end or shortly thereafter. This nearly 12% forecast price appreciation is expected to come mostly from a higher PE. Expansion is being driven by a slowing consumer economy, keeping interest rates low, and a healthy global and business economy, keeping S&P EPS growth positive.”