Barclays Raises Year-End S&P 500 Target
On Wednesday, Barclays became the latest firm on Wall Street to increase its year-end target for the S&P 500. Analysts seem to feel that perhaps the worst of this year’s tariff impacts could be behind us, which is a somewhat optimistic shift.
According to a Barclays analyst, “It is likely that uncertainty at the peak of tariffs will be passed, so a small rating will be expanded from here.” Their forecast has moved up to 6,050 from a previous 5,900.
Other firms are also adjusting their expectations, referencing a reduction in global trade disputes, the resilience of the U.S. economy, and the promising developments of tax and spending legislation. For instance, German Bank raised its forecasts recently, and UBS has adjusted its targets to 6,550 and 6,000.
While the market outlook shows some signs of improvement compared to last month, it still feels more subdued than earlier in the year when there was greater optimism regarding a robust growth strategy from President Trump. Notably, among the Wall Street firms tracked by CNBC Market Strategic Research, only two have maintained their expectations for this year’s S&P 500.
Barclays has kept its earnings per share forecast unchanged, predicting it will remain around $262 for the year, down from an initial $271. Although several of Trump’s tariffs have been postponed or softened, it’s anticipated that they may still directly reduce the index’s EPS by nearly $10. Slower global growth and diminished consumer spending might drag down an additional $1 to $2.10. Interestingly, the unexpected boost in first-quarter revenues and inflation linked to tariffs might counterbalance some of these pressures.
The firm predicts corporate revenue growth will stabilize by 2026. Tariffs could continue to impact consumer spending, especially given the backdrop of slower global growth. However, advances driven by AI are expected to more than neutralize these challenges. Barclays estimates that by 2026, the S&P 500 could close around 6,700, approximately 12% higher than its position at the end of Tuesday.
