Yardeni lifts S&P 500 target to 8,250 as earnings defy macro risks

Wall Street strategist Ed Yardeni raised his year-end 2026 S&P 500 target to 8,250 from 7,700 on Saturday, keeping his position as the most bullish forecaster on the Street. He cited what he called an “earnings-led meltup” in US equities.

The founder of Yardeni Research also lifted his 2027 earnings estimates and raised the probability of his “Roaring 2020s” thesis continuing to 80 per cent, up from 60 per cent. He merged it with a separate “meltup” scenario that had carried 20 per cent odds. The recession probability held at 20 per cent.

“We’ve never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months,” Yardeni wrote in a note to clients over the weekend. “The result has been an earnings-led meltup in the stock market.”

The S&P 500 has rallied to all-time highs this year on strong corporate profits and sustained investor demand for artificial intelligence stocks. Marcus Holloway reported Saturday that AI-driven gains have pushed the index to records even as valuations outpace underlying earnings growth, leaving the market dependent on the bull case continuing.

Yardeni now projects S&P 500 earnings per share of $330 for 2026, up from his prior estimate of $310. For 2027, he raised his EPS call to $375 from $350. Revenue per share estimates climbed by $100 for both years, to $2,200 and $2,300. Yardeni called it the fastest pace of upward earnings revisions in decades.

“Our key assumption is that the economy will remain resilient, and so will earnings,” Yardeni said. “That’s been our mantra since we first started writing about the Roaring 2020s during the summer of 2020.”

The strategist described any market pullback as a buying opportunity. A downturn, in his view, would not trigger a recession or bear market. He recommends investors look beyond US equities to global stocks, particularly emerging markets excluding China, where valuations are cheaper than the US market.

The bull case in context

Yardeni’s 8,250 target puts him ahead of every major Wall Street house. Oppenheimer’s John Stoltzfus sits at 8,100, Deutsche Bank at 8,000, Morgan Stanley at 7,800, Citigroup at 7,700, and both JPMorgan and Goldman Sachs at 7,600. The S&P 500 closed Friday near 7,900. Yardeni’s call implies roughly 4.4 per cent additional upside by year-end. His longer-range forecast projects the index reaching 10,000 by the end of 2029.

The gap between the top and bottom of the Street’s range, from Yardeni’s 8,250 to Goldman’s 7,600, spans 650 points, or roughly 8.2 per cent of the index. That dispersion is wider than in a typical year, pointing to genuine uncertainty about whether the earnings cycle has further to run or is approaching a peak.

Yardeni is betting the cycle extends. The revision to his Roaring 2020s probability collapsed a 60 per cent base case and a 20 per cent meltup scenario into a single 80 per cent call. He is no longer hedging the bull case with a separate meltup bucket; he is folding the meltup into the central forecast.

The risks Yardeni is looking past

Not every forecaster shares the optimism. The Strait of Hormuz remains closed after the US-Iran military escalation that hit energy markets in April. Oil inventories are dwindling and a cohort of energy analysts warns that crude supplies could tighten sharply if the standoff persists, forcing central banks to resume rate hikes to contain a stagflationary shock.

Bond vigilantes have also stirred. US Treasury yields have pushed higher in recent weeks as markets price in the risk that the Federal Reserve, under an incoming chair expected to be Kevin Warsh, holds rates elevated for longer. Holloway reported Saturday that analysts see the Warsh nomination raising the odds of a bull-market unwind. Some warn that a policy error during the transition could trigger the kind of repricing event Yardeni’s framework treats as low-probability.

Yardeni acknowledged the risks but argued they are already reflected in his 20 per cent recession probability. The strategist has held that figure through multiple macro shocks and appears unwilling to raise it without a direct signal of an earnings contraction.

A decade-halfway call

The Roaring 2020s thesis, which Yardeni first advanced in mid-2020, rests on the argument that technology-driven productivity gains, consumer spending, and corporate investment would drive above-trend growth through the decade. The call has been tested repeatedly: by the 2022 inflation shock, the fastest Federal Reserve tightening cycle in four decades, and now by a Middle East conflict that has closed a critical energy chokepoint.

That Yardeni is raising targets rather than trimming them, with Hormuz still shut and a trade-war hangover from the Trump administration’s global tariff regime, signals that the earnings data are overwhelming the macro anxieties, at least for now. Consensus earnings estimates are rising faster than at any point in recent decades, as Yardeni noted.

JPMorgan itself reversed an earlier cut late last month, lifting its S&P 500 view after reducing it to 7,200. The upward revision wave is broad, and Yardeni, the Street’s longest-standing bull, is now its loudest.