Jefferies warns against fighting the earnings cycle, expects S&P 500 to rise to 8,000 by end of 2026 and hit 9,000 in 2027.
Jefferies, in its latest research report on September 14, stated that Wall Street might be significantly underestimating the explosive power of the current earnings cycle. Driven by the dual engines of the AI investment frenzy and better-than-expected corporate earnings, the firm projects the S&P 500 index to reach 8,000 points by the end of 2026 (based on an EPS of $373 and a P/E ratio of 21.5x), and further touch 9,000 points in 2027 (based on an EPS of $450 and a P/E ratio of 20.0x). The report also highlighted two core risks: a substantial slowdown in earnings growth for AI-related companies and a sustained rise in the 10-year U.S. Treasury yield.
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