Bank of America has introduced a 12-month target of 7,800 for the S&P 500, implying roughly 2% upside from current levels, while raising its year-end forecast to 7,400 from 7,100. In a note published this week, strategist Savita Subramanian wrote that the 12-month target is nothing to write home about, suggesting 2% from here, and said the revised year-end projection implies a decline of approximately 3% from current levels. She expects investors to get a chance to enter at lower levels, noting the S&P 500 has seen only one decline of at least 5% this year, in March, versus three in a typical year, and that about half of BofA's bear-market indicators have been triggered. The bank flagged inflation, Federal Reserve policy, earnings quality and credit conditions as potential sources of market risk, with Subramanian saying current price-to-earnings valuations imply an inflation outlook well below the bank's own forecasts, and she invoked the 1970s, when upside inflation risks, dollar depreciation and Fed rate increases coincided with an equity decline exceeding 40%. She called concerns about a Democratic sweep in the midterm elections a red herring for capital expenditure, arguing state governments largely drive the artificial intelligence infrastructure expansion, and kept her longer-term positive view on equities on potential productivity gains. BofA forecasts S&P 500 earnings growth of 33% in 2026 and a further 12% increase in 2027, and within equities prefers large-cap value stocks, selected small- and mid-cap companies and the equal-weighted S&P 500 over the traditional market-capitalisation-weighted index.
Bank of America CorpBofA raises its S&P 500 year-end target to 7,400 and sets a 12-month target of 7,800, an analyst/valuation call on the index rather than a company-specific development.
