One of Wall Street’s most skeptical stock-market strategists is sticking to his cautious stance even while issuing a mea culpa for his bearish 2021 prediction.

Our S&P 500 price targets proved to be too low—i.e., wrong,” Morgan Stanley’s chief U.S. equity strategist Mike Wilson wrote in a note to clients in mid-November. Still, “with financial conditions tightening and earnings growth slowing, the 12-month risk/reward for the broad indexes looks unattractive at current prices.”

In his base-case scenario, Wilson expects the benchmark gauge to slide to 4,400 over the next 12 months, implying a 6% decline from the index’s November 12 close of 4,683. While S&P 500 profits are projected to extend their expansion, reaching $245 a share in 2023, he warns that a growth slowdown and withdrawal of Federal Reserve stimulus will likely pressure equity valuations.

At the start of the year, Wilson called for the S&P 500 to end 2021 at 3,900. Reflecting on his own forecast, Wilson acknowledges that he underestimated corporate America’s earnings power as well as investors’ willingness to pay up for shares. Profits from S&P 500 firms in 2021 are on track to beat his estimate by 7%. At 21 times earnings, the index is trading at a multiple that’s two points higher than what he projected.

Stocks have rallied this year, with the S&P 500 up 25% and crushing the highest year-end target that Wall Street strategists envisioned in a January survey by Bloomberg. Along the way, the index has posted 65 all-time highs, making it poised for the second-most annual records ever, behind only 1995.