economy
BMO raises S&P 500 year-end target citing ‘unprecedented’ earnings growth
BMO Capital's new year-end S&P 500 target of 7,850 implies that the benchmark index could rise 8% from here.
TL;DR
- BMO Capital Markets raised its 2026 year-end S&P 500 target to 7,850, predicting an 8% rally.
- The rally is attributed to a robust macroeconomy and unprecedented earnings growth.
- Forward earnings for the S&P 500 are at an unusual rate of 29%.
- Earnings growth is also strong for mid-cap (18%) and small-cap (24%) stocks.
- Inflation is predicted to be the main story of 2026, but earnings will likely be the near-term focus.
- BMO maintains a bullish bias towards cyclical sectors.