S&P 500 Gets Two More Price-Target Upgrades

Rapidly rising earnings estimates have prompted another pair of market-watchers to lift their 2026 year-end targets for the S&P 500 (SPX).

On Monday morning, HSBC Global Investment Research adjusted its official price target higher, to 7,650 from 7,500 previously, citing higher expectations for corporate profits.

"A solid Q1 earnings season is also providing support," says Nicole Inui, Head of Equity Strategy, Americas, at HSBC Global Investment Research. "We're taking the opportunity to revise our 2026 index EPS estimates up by 8%, incorporating the latest quarterly results. We now expect 2026 EPS growth of 20%, or $325, with [technology stocks and the Magnificent 7] still the main drivers."

The relatively muted target represents a modest climb of more than 3% from Friday's close, which Inui chalks up to "shakier" sentiment. "The recent rally has been relatively narrow in breadth. Most stocks are still trading below their 52-week highs, suggesting scope for further upside if participation broadens. For that to happen, we'd look for a rebound in sentiment across tech, continued AI adoption, and an easing of concerns around geopolitics, trade, and rates."

She says a rebound in sentiment could send the HSBC toward a stretch goal of 8,000 by Dec. 31, which would represent another 8% from here and roughly 17% gains from the start of 2026. Among the potential drivers? "Tech re-rates as IPOs set a higher bar for valuations, laggards catch-up as geopolitical and trade uncertainties fade, AI efficiency gains broaden as margins expand, and a 'Goldilocks' backdrop returns as long-term rates fall.

Conversely, she says that sustained elevated oil prices slowing economic growth could hold the S&P 500 back, as could a slowdown in technology-sector earnings and/or a hawkish pivot by the Federal Reserve if inflation speeds up again.

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Yardeni Sees S&P 8,250 by Year's End

HSBC's upgrade follows a much more bullish call over the weekend from market veteran Ed Yardeni, of Yardeni Research.

Yardeni is now looking for the S&P 500 Index to rise to 8,250, which would represent an 11.5% improvement from Friday's close and a 20%-plus gain across 2026. Like with HSBC, his optimism comes on the back of improving profit expectations.

"We've never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months," Yardeni writes. "The result has been an earnings-led meltup in the stock market."

Yardeni also upgraded his 2026 and 2027 earnings estimates. This year, he sees S&P 500 firms generating $330 in earnings per share (EPS), up from $310 previously. He also lifted 2027 EPS projections to $375 from $350 previously. Both of those numbers should come on better top-line results; Yardeni lifted his S&P 500 revenue estimates to $2,200 per share (from $2,100) and $2,300 (from $2,200) in 2026 and 2027, respectively.

"Nevertheless, for now, we are sticking with our 10,000 target for the S&P 500 by the end of 2029," Yardeni writes. “It might arrive ahead of schedule.”

Other Recent S&P Upgrades

Last Friday, RBC hiked its year-end 2026 S&P 500 target to 7,900 (+7%) from 7,750 previously. Lori Calvasina, head of U.S. equity strategy, writes that the implied fair value level for the S&P 500 from our valuation/earnings per share test has improved due to the improvements in bottom-up consensus [earnings] forecasts for the next four quarters."

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RBC warned, however, that continued fighting in the Middle East could result in downgrades to earnings estimates for 2026 and 2027. So too could profit taking in semiconductor stocks, which have been among the market's strongest performers so far this year. Calvasina also says valuation levels in not just the S&P 500, but also the Russell 2000, are worth watching.

And in late April, JPMorgan relented on an earlier cut-back in its S&P 500 target, raising its expected price to 7,600 from 7,200 previously. The firm wrote that its upgrade was "supported by an upward revision to our EPS forecast (now $330) largely reflecting stronger expectations in Tech / AI, rather than a removal of the geopolitical overhang."

"Should geopolitical tensions move toward a swift resolution ("Blue Sky" scenario), we would expect the multiple to re-expand back toward 23x, which would imply an S&P 500 level of ~8,000," they added.

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