In a noteworthy shift in sentiment, Ed Yardeni, President of Yardeni Research, has amplified his optimism regarding the stock market, forecasting a dramatic rise in the S&P 500 by the end of the year. Raising his year-end target to 8,250—up from a previous estimate of 7,700—Yardeni has established himself as one of the most bullish voices on Wall Street.
Yardeni’s revised prediction surpasses the forecasts of major firms including Oppenheimer (8,100), Deutsche Bank (8,000), and Morgan Stanley (7,800), with even Goldman Sachs and JPMorgan trailing behind at 7,600 and 7,600, respectively. As earnings reports continue to roll in, it is expected that these firms may also adjust their expectations upward.
Highlighting his unique perspective, Yardeni noted that Wall Street analysts appear to be ahead of his earlier projections regarding earnings growth. “We’ve never seen consensus earnings expectations rise so quickly for the current and coming years,” he remarked, attributing this rapid increase to an earnings-led surge in the stock market. For this year, he predicts earnings per share for large-cap companies will hit $330, a significant rise from his earlier estimate of $310, and he anticipates an EPS of $375 for 2027, up from $350.
In addition to strong earnings growth, Yardeni has also adjusted his revenue per share projections for the S&P 500, now forecasting $2,200 for 2026 and $2,300 for 2027, nearly aligning with the prevailing market consensus. His assessment hinges on the assumption that the U.S. economy will maintain its resilience, a stance he has been advocating since he began discussing the Roaring 2020s back in the summer of 2020.
The U.S. economy’s robust recovery from the COVID-19 pandemic has been commendable, navigating challenges such as the supply chain crisis stemming from Russia’s war on Ukraine, aggressive interest rate hikes from the Federal Reserve, and the repercussions of trade wars initiated during the Trump administration. Consequently, Yardeni has increased the probability of the Roaring 2020s continuing to 80%, combining it with his meltup scenario, which previously held a 20% likelihood.
Yardeni views any potential market downturn not as a harbinger of recession or bear markets but as a prime buying opportunity, keeping recession odds at a modest 20%. Despite these positive sentiments for U.S. equities, he remains cautiously optimistic about global stocks, particularly in emerging markets (excluding China), which he considers more attractive in terms of valuation.
This upgraded outlook for the S&P 500 aligns with recent trends, as U.S. stock indexes have reached new highs following a substantial rebound from sell-offs triggered by geopolitical tensions, particularly the U.S.-Israeli conflict regarding Iran. Investors appear to be banking on a sustained ceasefire, which may eventually facilitate the reopening of crucial oil transit routes such as the Strait of Hormuz—despite ongoing warnings from energy experts about the precarious state of oil supplies.
While acknowledging the risks associated with renewed hostilities—potentially leading to stagflation and further rate hikes from central banks—Yardeni remains resolute in his long-term predictions, stating that he is sticking to a target of 10,000 for the S&P 500 by the close of 2029, a milestone he believes could be achieved sooner than expected.
