Deutsche Bank has raised its earnings outlook for the S&P 500, reinforcing Wall Street’s increasingly bullish stance on U.S. equities as strong corporate results continue to exceed expectations.
In a note published on August 3, the bank increased its 2026 earnings-per-share (EPS) forecast for the S&P 500 to $358 from $342. It also lifted its 2027 estimate to $420 from $390, implying earnings growth of 28% and 17%, respectively.
Notably, the benchmark index has rallied almost 10% in 2026, valued at 7,489 as of press time.
The upgrade comes after a stronger-than-expected second-quarter earnings season, with Deutsche Bank citing broad-based profit growth, rising margins, and continued momentum from artificial intelligence-related investment.
According to the banking giant, 87% of S&P 500 companies have beaten earnings expectations so far this quarter, the highest proportion on record.
Aggregate earnings have exceeded estimates by 7%, driven by stronger sales and expanding margins. Deutsche Bank expects S&P 500 earnings growth to accelerate from 25% in the first quarter to 33% in the second, one of the strongest rates outside post-recession recoveries.
Revenue growth has reached a 25-year high, while profit margins are projected to hit a record 15.7%. Analysts have also continued raising earnings forecasts for the second half of 2026 and 2027, bucking the usual trend of downward revisions during earnings season.
The bank noted that earnings growth is becoming more broad-based. All 11 S&P 500 sectors are on track for positive growth, with eight expected to post double-digit gains.
Meanwhile, the contribution from megacap technology stocks has fallen to 57% from 90% a year ago, signaling wider participation across the market.
The bank attributed the improved outlook to stronger economic activity, a recent recovery in purchasing managers’ index (PMI) data, and continued investment in AI infrastructure.
Wall Street remains bullish on S&P 500
Deutsche Bank’s earnings upgrade aligns with a broader trend across Wall Street, where major firms have been raising their S&P 500 forecasts throughout 2026.
Analysts increasingly expect earnings growth, rather than valuation expansion, to drive further gains in the benchmark index. Many firms now forecast 2026 EPS between $340 and $350, with several expecting earnings to approach $390 or higher in 2027.
The improving profit outlook has supported increasingly bullish S&P 500 targets. Citigroup and Oppenheimer currently hold year-end targets of 8,100, while Goldman Sachs, Morgan Stanley, and Deutsche Bank are targeting roughly 8,000.
Wells Fargo recently raised its forecast to 7,950, while JPMorgan, Barclays, and Stifel have set targets near 7,800.
Although some firms remain cautious due to valuation concerns and potential inflation risks, the prevailing view on Wall Street is that resilient corporate earnings and continued AI-driven investment should provide support for the S&P 500 through the remainder of 2026.
