Citigroup’s equity strategy team, led by Scott Chronert, lifted its 2026 earnings-per-share estimate for the S&P 500 to $365 from $350 while keeping its year-end index target at 8,100. The bank said second-quarter earnings reports showed room for further upside in revenue and margins, with corporate profit resilience proving stronger than expected. The call came as U.S. stocks hit fresh records. After July producer price index data came in below expectations, concerns about Federal Reserve policy pressure eased, leaving the S&P 500 near record highs. Citi argued the rally is not solely a valuation story: upward earnings revisions are providing fresh support. Still, AI remains the critical variable for reaching 8,100. The bank said AI-related industries still make an important contribution to index earnings, and if AI infrastructure, semiconductors, cloud services and the power-supply chain keep converting demand into revenue, the market will find high valuations easier to accept. Citi also stressed that the rally has room to broaden, with more sectors’ earnings improving and helping U.S. stocks move beyond a structure dependent on a handful of tech giants.
Citigroup has upgraded its outlook for the U.S. earnings cycle. In a report released on Aug. 14, the bank’s equity strategy team, led by Scott Chronert, raised its 2026 EPS forecast for the S&P 500 to $365 from $350. The year-end target of 8,100 was left unchanged.
The team pointed to second-quarter earnings as evidence that revenue and margins still have room to climb. Profit resilience, it said, is holding up better than previously expected. The upgrade lands as U.S. stocks set fresh highs. July’s producer price index came in soft, easing worry about Federal Reserve policy pressure, and the S&P 500 remains near record levels.
According to Citi, the current advance is not just valuation expansion. Rising earnings estimates are giving the index a new layer of support.
Still, AI remains the decisive factor for hitting the 8,100 target. Citi said AI-related industries continue to matter a lot for index earnings. If AI infrastructure, semiconductor, cloud and power-chain players keep converting demand into revenue, the market will be more willing to accept elevated valuations.
The bank also argued the rally has scope to broaden. More sectors reporting better earnings would help U.S. equities move away from relying on a handful of tech giants.
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