(Bloomberg) — US stocks will end 2023 almost unchanged from their current level — but will have a bumpy ride to get there, according to Morgan Stanley’s Michael Wilson.

The top-rated strategist sees a “volatile path” to get to his 2023 year-end S&P 500 base-case target of 3,900 index points, about 2% below where the gauge closed on Friday. He expects stocks to fall as earnings estimates come down, before rebounding in the second half of the year.

“The path forward is much more uncertain than a year ago, and likely to bring several twists and days/weeks of remorse for investors regretting they traded it differently,” Wilson wrote in a note on Monday. In the short-term, he sees the stock-market rebound sparked by last week’s good inflation data running for a few more weeks.

The portfolio strategist — who correctly predicted the slump this year and is ranked No. 1 in the latest Institutional Investor survey — said consensus earnings estimates for 2023 are still much too high. His base case is for US company profits to decline 11% in 2023, before a strong rebound in 2024 as positive operating leverage returns.

His comments sound another warning for US companies wrapping up their weakest earnings season since the first quarter of 2020, marked by the impact of high inflation, a stronger dollar and some dramatic profit warnings.

Five Biggest Takeaways From This Results Season: Earnings Watch

Wilson expects the S&P 500 to trough between 3,000 and 3,300 index points — at least 17% below current levels — in the first quarter. He recommends investors stay defensively positioned from a sector and style standpoint “until the estimates reflect the bust.” After upgrading staples, the strategists are overweight on that sector as well as health care, utilities and defensively-oriented energy stocks.

JPMorgan Chase & Co. strategist Mislav Matejka is more positive. He sees continued support to equity markets from a peak in bond yields, cooling inflation, light positioning, and the likelihood of a smaller-than-typical earnings contraction, according to a report on Monday.

Still, contrary to recent market optimism, Wall Street remains skeptical that the Fed will deliver a soft landing.

As the central bank continues to push toward policy overtightening, a recession may be probable — and the stock market isn’t pricing that in, BlackRock strategists led by Jean Boivin wrote in a report on Monday.

“Surging stocks show markets believe hopes of a soft landing by the Fed to be true,” they wrote. “We disagree and stay underweight developed market stocks.”

(Adds BlackRock’s perspective in last 3 paragraphs)