RBC's Lori Calvasina breaks down her 2026 S&P 500 year-end target of 7,750

Summary

Lori Calvasina, RBC Capital Markets' head of U.S. equity strategy, discusses her 2026 year-end S&P 500 target of 7,750, implying about 13% upside from the December 31 close. She expects price appreciation to roughly match 13-14% consensus EPS growth, with no material multiple expansion or contraction. Her valuation model assumes 2.7% inflation, one more Fed cut, and flat 10-year yields, which imply a flat P/E. She also highlights resilient earnings and margin expansion driven by technology/productivity, with sector divergence in 3Q margin results.

• RBC sets a 2026 year-end S&P 500 target of 7,750.
• The target implies roughly 13% upside from the December 31 close.
• The forecast is earnings-driven rather than multiple-driven.
• The valuation model assumes 2.7% inflation, one more Fed cut, and flat 10-year yields.
• A flat P/E multiple is expected versus 2Q.
• Earnings resilience is tied to productivity and technology-driven margin gains.
• 3Q sector margins showed tech strength, materials possibly up, and industrials lower.
• Tariffs did not materially change overall S&P 500 margin assumptions in her review.