Stocks are at record highs, and Ed Yardeni thinks there’s room for further upside. The president of Yardeni Research and a longtime market strategist raised his year-end target for the S&P 500 to 8,250 from 7,700. This is 11.5% higher than Friday’s closing price of 7,398.93. The driving force behind this sharp outlook can be summed up in one word: profit. “I’ve been bullish, but not bullish enough,” Yardeni told CNBC’s “Squawk Box” in an interview Monday. “Analyst earnings estimates are amazing. I’ve never seen anything like this.” Yardeni is not alone in being bullish on the stock after strong results. HSBC raised its forecast for the S&P 500 index in 2026 to 7,650, noting the benchmark could rise above 8,000. The year-end profit forecast was also revised upward by 8%. To be sure, this earnings season has been exceptional. More than 400 S&P 500 companies have reported financial results, and 84% of them exceeded their bottom line estimates, according to FactSet. If this beat rate is maintained through the end of the reporting period, it would be the highest beat rate since the second quarter of 2021, said John Butters, senior revenue analyst at FactSet. These companies also posted impressive year-over-year revenue growth of 25.6%, which is much higher than the five-year average of 7.1%. However, soaring oil prices due to the war between the US and Iran may put pressure on future profits. West Texas Intermediate futures have soared 71% this year. But Yardeni isn’t too worried. “The key to all of this… is not to underestimate the resilience of the economy, the resilience of consumers. If this continues, so will profits,” Yardeni said, adding that analysts were raising their profit estimates for the second and third quarters. This week’s financial results calendar is sparse with only eight S&P 500 members scheduled to report. Next week, artificial intelligence giant Nvidia and retail giants Home Depot, Walmart and Lowe’s are expected to announce results.
