UBS is positive that, based on historical trends, the S&P 500 will likely move higher in 2027, but Bank of America is not particularly bullish on the index.

  • UBS is eyeing a year-end 2027 S&P 500 target at 8,900.
  • The firm projects earnings per share of $430 next year, followed by $490 in 2028.
  • Bank of America head of U.S. equity and quantitative strategy Savita Subramanian said the S&P 500 could be tough to rally. 

Amid a volatile couple of months on Wall Street, analysts have a mixed stance on where the benchmark S&P 500 index can head next year. UBS is positive that, based on historical trends, the index will likely move higher in 2027. However, Bank of America thinks the S&P 500 could be tough to rally. 

Why UBS Is Bullish On The S&P 500 In 2027

According to a report from Investing.com, UBS is eyeing a year-end 2027 S&P 500 target at 8,900, saying that historically, a year’s sharp fall in valuations set up stronger returns.

Strategist Keith Parker reportedly highlighted in a note that the S&P 500’s forward price-to-earnings ratio fell about 20% in 2026. Meanwhile, the firm sees earnings on track to grow about 33%. 

While Parker said that worries about returns on AI spending and regulation, higher bond yields and credit spreads, rising oil prices and weaker share buybacks are all headwinds for the index, history has been supportive — in the years after the S&P 500’s price-to-earnings have fallen more than 10%, the index has returned a median 20%.

As per the firm, the S&P 500’s earnings per share EPS growth will come in at 18% to $430 in 2027 and at 14% to $490 in 2028. Its 8,900 target equals about 18 times 2028 EPS, while its end-2028 target is 9,600.

However, UBS noted that state-level pauses on data center construction after the midterms put about 30% of planned U.S. capacity additions in 2028 at risk.

The firm said that it recommends buying semiconductors over tech hardware, and is overweight on software, hyperscalers, health care and financials. It also added that it favors buying the Nasdaq 100 over the Russell 2000 and stocks with strong balance sheets.

BofA Highlights S&P 500 Index Risks

However, Bank of America head of U.S. equity and quantitative strategy Savita Subramanian said the firm is not particularly bullish on the S&P 500. 

In an episode of Sozzi Unleashed, Subramanian said "I think the index itself is a bit risky because the other thing that I worry about is we've been in a 30-, 40-year period where we've seen S&P index inflows every year. We've never been in a market environment where the index has seen outflows.”

She added that there are concerns about being fairly saturated in equities across the board, with the S&P 500 possibly being the most crowded equity ticker in the world. 

She highlighted the rising hyperscalers debt and concerns about the sustainability of the AI trade.

"So if you need to raise capital to meet your yield obligations or what not, I think that that's where things get a little bit interesting in terms of outflows. And that's where we see some risks to this thesis that the S&P 500 is just going to go up forever," Subramanian warned. 

Retail Stance On The S&P 500

On Stocktwits, retail sentiment around the State Street SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, was ‘bullish’ at the time of writing. 

Meanwhile, for the Invesco QQQ Trust Series 1 (QQQ), which tracks the Nasdaq, it was ‘neutral.’

The SPY is up nearly 11% in 2026, while the QQQ has gained about 10% in the same time. 

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