The nature of this year’s stock gains suggests they will continue, a JP Morgan Private Bank executive said.
In a new one interview On CNBC, Stephen Parker, co-head of the bank’s global investment strategy, says his base case for the S&P 500’s year-end target is 7,800, but his bull case is 8,900.
“The rally we’ve seen this year has been entirely driven by earnings. Even the most optimistic expectations have been consistently exceeded, and we think the earnings momentum will continue through the end of the year. So if you look at our base target, that actually implies lower multiples from here. If you even get multiples to stay where they are with that earnings growth, then that 8,900 number is achievable.”
The S&P 500 is trading at 7,472.12 at the time of writing.
Parker says there are expectations that 8 of the 11 sectors in the S&P 500 will achieve double-digit earnings growth.
The bank executive notes that any sign of a fundamental slowdown in the 2026 investment story would undermine confidence in their expectations.
“But we don’t see that happening. The bigger risk would be if it suddenly wasn’t the fundamentals, but rather optimism, exuberance and animal spirits. That would make us nervous. If multiples became a bigger part of the growth story than earnings, then we would probably become a little more concerned.”
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