Oppenheimer lifts S&P 500 target back to 7,100

Investing.com -- Oppenheimer has reinstated its year-end price target for the S&P 500 to 7,100, citing recent trade deals that have eased market uncertainty. 

The firm had lowered its forecast to 5,950 in April but now sees a clearer path for gains after agreements with Japan and the European Union.

“With the announcement of trade deals by President Trump and his administration … we believe that enough ‘tariff hurdles’ have been overcome for now to reinstate our original price target for the S&P 500 of 7,100 by year-end,” Oppenheimer wrote. 

The revised target implies 11% upside from where the index closed on July 25.

The firm also reinstated its earnings projection of $275 for 2025, which equates to a forward price/earnings multiple of 25.8. 

“Corporate revenue and particularly earnings growth for Q4 and Q1 for firms in the S&P 500 surprised well to the upside,” the note said, adding that “84% of companies reported exceeding analyst consensus expectations” for the current second quarter.

Oppenheimer emphasised the resilience of the U.S. economy and the Fed’s success in bringing inflation down from 9% in June 2022 to 2.7% last month “without thus far causing a recession.”

“We consider it important for investors to seek out ‘babies (quality stocks) that get tossed out with the bath water’ in market downdrafts,” the analysts wrote. 

The firm remains bullish, favouring cyclicals over defensives and overweighting U.S. exposure, while also maintaining positions in developed and emerging markets.

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