Barclays has raised its S&P 500 earnings and price targets for 2025 and 2026, pointing to stronger-than-expected results in the first half of the year and resilient corporate profits despite trade and labor headwinds.
The bank now forecasts the index will reach 6,450 by end-2025, up from a previous estimate of 6,050. This is based on expected earnings per share (EPS) of $268, compared with $262 earlier. For 2026, Barclays lifted its target to 7,000 from 6,700, with EPS projections of $295 versus $285 previously.
Strategists led by Venu Krishna said that AI-driven growth and strong corporate earnings are offsetting emerging labor market risks. They added that three expected Federal Reserve rate cuts this year should help balance pressures in the U.S. economy.
Earnings momentum has been fueled by Big Tech and Financials, while tariff effects have been “less severe than anticipated.” New tax provisions are also expected to support GDP growth through 2026.
Still, Barclays described consensus estimates as “too optimistic.” It projects $268 EPS for 2025 compared with Wall Street’s $269, and $295 for 2026 versus the Street’s $307.
Sector outlooks were also revised. Barclays upgraded the broader technology sector, citing strong demand for data centers and easing disruption concerns in software. Financials remain Positive, while Healthcare and Materials shifted to Neutral. Consumer, Industrials, and Energy remain Negative.
The bank acknowledged macroeconomic risks, particularly a softer labor market, with unemployment at a three-year high. Even so, strategists expect equities to benefit from Fed rate cuts and favorable seasonality later in the year.
Barclays’ bull case sees EPS at $273 in 2025 and $309 in 2026, while its bear case foresees $260 and $278, respectively.
