RBC Raises 12-Month S&P 500 Target to 7,900 on Stronger Earnings Outlook

RBC Capital Markets raised its 12-month target for the S&P 500 to 7,900 from 7,750 on Friday, May 8, 2026, citing stronger-than-expected first-quarter corporate earnings and what it called a supportive economic backdrop.

The revised forecast puts RBC among the more bullish Wall Street strategists. Comparisons can be difficult because RBC’s forecast uses a 12-month horizon rather than a year-end target, but Deutsche Bank’s year-end 2026 target of 8,000 was higher, according to the report.

RBC said the upgrade reflects improved bottom-up consensus earnings forecasts for the next four quarters. The S&P 500 has recently set a new record high, helped in part by strong earnings results and renewed interest in AI-related stocks.

Risks RBC is watching

Despite the upgrade, RBC highlighted several “tactical risks” it is monitoring.

It said valuation levels in the S&P 500 and Russell 2000 could become a concern if the indexes return to past highs, potentially signaling short-term overbought conditions.

RBC also warned that geopolitical events could lead to downward revisions to late-2026 or 2027 earnings-per-share expectations. In addition, it pointed to the risk of profit-taking in semiconductor stocks, which it said have been a major contributor to recent S&P 500 gains, and noted that U.S. midterm election years have historically tempered market optimism.