Bank of America Raises S&P 500 (SPX) Target for 2025

Bank of America (BAC) raised its year-end target for the S&P 500 (SPX) to 6,300, from 5,600 previously. The new target represents only a 1.1% upside from Monday's close. BAC strategist Savita Subramanian explained that it's difficult to see a positive catalyst for the S&P 500 to continue its "meteoric rally" in the third quarter. Her EPS Surprise model is mixed.

In April and May, negative guidance and downgrade revisions improved to average levels. However, economic surprises have deteriorated, and tech earnings are slowing.

Political Uncertainty and Corporate Earnings

The BAC revision follows new record highs for the S&P 500 (SPX) last week. The market reversed the sharp declines seen in April, when the tariffs announced on the 2nd caused a decline of nearly 20%.

Subramanian had lowered his target from 6,666 to 5,600 after the drop, like other strategists. But the rebound prompted several banks to raise their closing projections for this year again.

Although political uncertainty and volatility due to the OBBA persist, she emphasizes that corporate transparency remains strong. The strategist highlighted that the spread of EPS estimates is near post-COVID lows, reflecting confidence in the projections. However, she sees little room for further increases.

The new target of 6,300 is just above the CNBC Market Strategist Survey average of 6,208. Subramanian previously had the lower target, tied with Julian Emanuel of Evercore ISI.