UBS raised its earnings forecasts and S&P 500 index targets, citing a more optimistic earnings outlook and growing confidence that growth will persist throughout next year.
The bank now expects S&P500 earnings per share to be $350 in 2026 and $400 in 2027, up from prior estimates of $335 and $375, implying growth of 25% and 14%, respectively. The bank raised its S&P500 targets to 8 100 points for December 2026 and to 8 400 points for June 2027.
UBS noted that the rally is becoming increasingly broad-based, supported by exceptionally strong 2Q financial results and improving conditions in more cyclical sectors of the economy, including manufacturing activity and growth in construction employment.
Risks include a sustained rise in oil prices, a resurgence of inflation, or signs that investments in artificial intelligence are delivering lower-than-expected returns. Under a bearish scenario, the index could fall to 5 500 points by June 2027, while in an optimistic scenario it could reach 9 500 points.