Forecast Update
Ed Yardeni, President of Yardeni Research, has raised his year-end 2025 S&P 500 target to 8,250 from 7,700—an 11.5% increase from Friday's close.
This makes him the most bullish among major Wall Street forecasters, surpassing targets from Oppenheimer (8,100), Deutsche Bank (8,000), Morgan Stanley (7,800), Citigroup (7,700), JPMorgan (7,600), and Goldman Sachs (7,600).
Rationale
Yardeni cited rising consensus earnings expectations as the primary driver.
"We've never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months."
He now expects S&P 500 earnings per share of $330 in 2025 (up from $310) and $375 in 2027 (up from $350). Revenue per share estimates were raised to $2,200 for 2025 and $2,300 for 2027.
Yardeni maintained a key assumption that "the economy will remain resilient, and so will earnings." He increased the probability of the "Roaring 2020s" continuing to 80% from 60%, merging it with a "meltup" scenario, while keeping recession odds at 20%.
Broader Context
The forecast comes amid new highs in U.S. stock indexes following a rebound from a selloff triggered by the U.S.-Israeli conflict with Iran. Despite the Strait of Hormuz remaining closed and declining oil inventories, investors anticipate a ceasefire extension leading to reopening.
Yardeni acknowledged the risk of renewed conflict and potential stagflation but maintained a 10,000 target for the S&P 500 by the end of 2029.
He recommended global stocks, particularly in emerging markets excluding China, citing relatively cheaper valuations overseas.