Overview
- Morgan Stanley on Wednesday lifted its year-end 2026 S&P 500 target to 8,000 and set a 12-month goal of 8,300.
- S&P 500 earnings are forecast at $339 per share for 2026, a 23% jump from last year, with further gains projected for 2027 and 2028.
- The call leans on AI adoption, efficiency gains and stronger pricing power, and it does not rely on Fed rate cuts though hotter inflation is a risk.
- A robust first quarter set the stage, with 83.2% of companies beating estimates, a 6% median EPS surprise, and earnings-revision breadth rising to 22%, according to LSEG.
- The team favors Industrials, Financials and Consumer Discretionary, sees large tech hyperscalers as attractive, and moves Healthcare to equal weight.