Key Takeaways:
- JPMorgan sets S&P 500 base case at 7,800, bull case at 8,900.
- Corporate profits rose 12% YoY, with Q1 earnings growth hitting 29%.
- Parker warns multiple expansion from "animal spirits" poses reversal risk.
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JPMorgan raises S&P 500 target to 7,800 on earnings-driven rally
JPMorgan raised its S&P 500 year-end target to 7,800, calling the rally entirely earnings-driven with corporate profits up 12%.
"The rally that we've seen this year has been entirely earnings driven," Stephen Parker, co-head of global investment strategy at JPMorgan Private Bank, said.
The new base case of 7,800 implies about 4.4% upside from the index's current level of 7,473. Parker's bull case of 8,900 requires eight of 11 S&P sectors to deliver double-digit earnings growth. First-quarter earnings surged 29% year over year, the fastest growth since 2021, while revenue rose 12%, according to FactSet Research.
The median year-end target among 19 Wall Street firms stands at 7,850, according to Reuters and Yardeni Research data. Parker flagged that multiple expansion driven by "optimism, exuberance, animal spirits" rather than fundamentals can reverse on a single bad headline.
The upgrade suggests JPMorgan expects earnings momentum to broaden beyond technology. Investors will watch second-quarter results in July for signs that profit growth is sustaining across sectors.
This article is for informational purposes only and does not constitute investment advice.
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