Banking giant sets new S&P 500 price target

• The Sell Side Indicator reached its most optimistic level since March 2025, but remains below thresholds historically associated with market peaks
• Bank of America analysts see no conditions typically preceding a market top, with strategists maintaining steady equity exposure amid confidence in corporate earnings
• Wall Street analysts continue forecasting double-digit earnings growth for 2026 with no downward revisions in early reporting season results

Summary

Bank of America has raised its S&P 500 price target, projecting a 12% gain over the next 12 months, which would push the benchmark index from its current level of 6,974 to approximately 7,815.

Key Indicators

The forecast is based on the bank's Sell Side Indicator, which tracks average equity allocation recommendations from Wall Street strategists. This indicator reached its most optimistic level since March 2025 in January, though it remains just below last year's peak. Bank of America uses a contrarian approach with this metric, becoming most positive when strategist sentiment is relatively cautious.

Market Outlook

Analyst Victoria Roloff emphasized that current conditions do not show typical warning signs of a market top. While strategist positioning has increased, it remains below thresholds historically associated with major market peaks. The S&P 500 demonstrated resilience in January, finishing the month higher despite a mid-month pullback related to geopolitical concerns.

Supporting Fundamentals

• No downward revisions to 2026 profit expectations in early earnings season
• Strategists continue forecasting double-digit earnings growth for next year
• Corporate commentary indicates robust confidence with fewer signs of weakening demand
• Steady equity exposure suggests confidence in corporate earnings strength

The bullish outlook reflects both technical indicator readings and solid underlying fundamentals, with Wall Street maintaining constructive views on U.S. equities despite already elevated sentiment levels.