Bank of America has raised its year-end S&P 500 target to 6,300, up from its previous forecast of 5,600.
The updated outlook, issued by chief equity strategist Savita Subramanian, reflects just a 1.1% potential upside from the index’s closing level of 6,229.98 on Monday.
Subramanian’s revision comes after the index reached new record highs last week, recovering from the losses experienced in April following a sharp sell-off triggered by the April 2 tariff announcement.
At the time, the S&P 500 fell nearly 20% from its February peak, prompting a wave of downward revisions from market forecasters, including Subramanian herself, who cut her target from 6,666 to 5,600.
Now, as markets stabilize, Subramanian joins several other strategists in adjusting expectations slightly upward.
Still, she remains cautious about the potential for further gains in the near term.
Lack of catalysts and mixed earnings outlook
Subramanian cited the lack of a clear positive catalyst to sustain the S&P 500’s rally into the third quarter. “It’s hard to identify a positive catalyst for the S&P 500 to continue its meteoric run into Q3,” she noted.
Of Bank of America’s five target-setting models, the one based on earnings surprises, which Subramanian described as their “near-term read,” is currently showing mixed results.
While negative earnings guidance and revisions in April and May have normalized, broader economic surprises have broken down.
Additionally, technology sector profits, a major driver of overall earnings growth, are projected to decelerate.
This confluence of factors suggests the current momentum may be difficult to sustain without a material shift in either earnings or macroeconomic sentiment.
Corporate fundamentals remain solid
Despite macro headwinds and policy uncertainties, Subramanian expressed continued confidence in the underlying strength of US companies.
“The US isn’t exceptional, but Corporate America might be,” she said, highlighting the resilience of corporate transparency and earnings guidance.
Even amid trade tensions, ongoing legislative uncertainty related to the One Big Beautiful Bill Act (OBBA), and persistent recession fears, most companies have continued to issue profit guidance.
She also noted that estimated dispersion, a measure of uncertainty around earnings forecasts, is currently near post-COVID lows, suggesting a relatively stable earnings outlook at the company level.
Strategist sentiment aligns around similar targets
With the new 6,300 target, Subramanian’s outlook is now closely aligned with the 6,243 average among strategists in the CNBC Market Strategist Survey.
Previously, she held one of the lowest targets on Wall Street, tied with Evercore ISI’s Julian Emanuel.
While sentiment has improved from the lows of April, the overall tone remains cautious.
As Q3 unfolds, much will depend on how corporate earnings evolve and whether economic data can support further gains in equity markets.
CFRA recently set a target of $6,525 for the S&P 500 at the end of 2025.
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