Wall Street Strategist Yardeni Raises S&P 500 Year-End Target to 8250 Points

The narrative of a bull market in U.S. stocks is accelerating.

The S&P 500 index hit a new all-time high last Friday, marking a cumulative increase of 16.5% from the low on March 30 of this year. Wall Street's veteran strategist, Ed Yardeni, promptly raised his year-end target for the S&P 500 in 2026 from 7,700 to 8,250 points, making it one of the highest target prices on Wall Street currently.

Today, HSBC also raised its year-end target for the S&P 500 from 7,500 to 7,650 points, citing the resilient growth in corporate earnings and expecting the index's earnings per share to grow by about 20% to $325 by 2026. HSBC said that if technology stocks' valuations continue to strengthen and lagging sectors recover, the index could break through 8,000 points.

Profit forecasts are being revised up at an unprecedentedly rapid pace

In his Sunday report, Yardeni wrote: "We have never seen the consensus profit expectations for the current and upcoming years revised upwards as rapidly as they have been in recent months. The result is an earnings-driven market melt-up."

Mike Wilson, an equity strategist at Morgan Stanley, also observed that in this cycle's first quarter earnings season, the median earnings per share growth rate and the amount of earnings surprises of the S&P 500 components have both reached a four-year high.

Yardeni specifically raised his revenue per share forecast for 2026 and 2027 by $100 each, to $2,200 and $2,300 respectively, roughly in line with the current consensus level of analysts. He expects profit margins to rise from 15.0% this year to 16.3% next year, slightly above the current market consensus, corresponding to S&P 500 earnings per share reaching $330 this year and $375 by 2027.

Based on a price-to-earnings range of 18 to 22 times, Yardeni provided a target range of 6,750 to 8,250 points for the S&P 500 by the end of the year, with his 8,250-point target price calculated using the expected earnings for 2027 at a 22 times price-to-earnings ratio.

It is worth mentioning that Yardeni admits he is not the most optimistic one. The current consensus of analysts has raised its earnings per share forecast to $336.49 (a year-over-year increase of 22.0%) and $386.70 (a 14.9% increase from the 2026 consensus forecast), both higher than Yardeni's forecasts. "The exuberance of the analysts is evident in their consensus forecasts, a situation we have never seen before."

Expanding earnings breadth is a true bull market signal

Yardeni particularly emphasized a key indicator: last week, the proportion of S&P 500 components with year-over-year positive growth in forward earnings per share reached 89.6%, and the proportion of forward earnings with positive growth reached 84.6%. "The rapid expansion of earnings breadth is a bullish signal," he said.

Based on this, Yardeni increased the probability of his advocacy for the "Roaring '20s"延续延续 from 60% to 80%, and incorporated the previously separate "melt-up scenario" (with a 20% probability) into this main scenario. He believes that any significant pullback will be a buying opportunity and will not trigger a bear market like the tech bubble burst in 2000, maintaining the same 20% recession causing bear market probability judgment.

Risks: Iran war, oil prices, and overbought signals

Yardeni did not overlook potential risks. He pointed out that high oil prices due to an Iran war remain a core variable threatening the global economy - "If the conflict escalates again, it could trigger stagflation, forcing central banks to raise interest rates, and bond vigilantes will also push up bond yields."

The technical side is also worth watching. BTIG technical strategist Jonathan Krinsky pointed out that the S&P 500 closed last Friday more than 7% above the 50-day moving average, but only 52% of its components are above their own 50-day moving averages. In the last 30 years, there has never been a situation where the index is more than 7% above the 50-day moving average, while less than 55% of its components are above it - usually at this time, about 86% of the