A few weeks ago, investment bank and wealth manager UBS (UBS) upgraded its outlook for America's most-tracked stock index. It's doing it yet again.
The Swiss bank now anticipates the S&P 500 to end 2025 at 6,600, up from the 6,100 target it laid out earlier this month, which replaced the company's previously-issued price target of 5,500 (which was released in April.)
That means, in the span of a short few weeks, UBS has raised its year-end price target by over 1,000 points, or about 9%. To that end, rather than play catch-up as it had been doing, the 6,600 price target represents a 2.25% premium to the S&P 500's current price intraday on Aug. 25, 2025.
The company's note cited the stronger-than-expected pace of earnings growth from the S&P 500. While the bank expected 5% earnings growth year-over-year in Q2, earnings growth was 8%. Beats and guidance raises were also higher than expected, leading to the new target.
It also singled out the strength of the Magnificent 7 tech stocks, while warning on AI valuation concerns. Mag7 stocks saw significantly higher earnings growth than the wider index; by UBS's estimates, those which had reported by the time of their report saw 30% higher earnings (besting the 20% expected by the bank's analysts.)
However, longer-term, UBS's analysts leave a lot up to estimation. The bank's mid-year target is 6,600, the same as its 2025 year-end target, insinuating that the bank sees volatility or potential bearishness in store for the first half of next year. It remains bullish though, as its mid-August note, set a year-end 2026 target of 6,800.
Its latest report did lay out dramatically different outlooks for mid-2026, though, likely dependent on the impact of tariffs, the strength of the economy, and the rate of the Fed's interest rate cuts.
In the most bullish outcome, the index could end up at 7,500, a 16% premium to current prices. It had previously indicated that there was an outcome where the index lands at 4,500 in the event of a hard landing, a 30.2% decrease from today's price.
UBS Group AG (UBS) is up 32.9% year-to-date.
