Deutsche Bank Hikes S&P 500 Target as Wall Street Turns Bullish

• Deutsche Bank (DB) raised its year-end S&P 500 (SPX) target to 6,550 from 6,150, a 10.35% increase over the last close of 5,935.94, citing a resilient U.S. economy and reduced tariff-related earnings drag.
• The S&P 500’s strong May performance, the best since November 2023, was fueled by solid corporate earnings, tame inflation, and a softer stance on tariffs by President Trump, though Deutsche Bank warns of potential volatility due to trade policy fluctuations.
• Deutsche Bank increased its S&P 500 earnings per share estimate to $267 from $240, joining other Wall Street brokerages like Goldman Sachs (GS), UBS, and RBC Capital Markets in upgrading forecasts.

Deutsche Bank (DB) has revised its year-end S&P 500 (SPX) target to 6,550 from 6,150, signaling confidence in a resilient U.S. economy and a reduced impact from tariff-related earnings pressures. This adjustment aligns with a wave of optimism among major Wall Street brokerages, with Goldman Sachs (GS), UBS Global Wealth Management, and RBC Capital Markets also raising their forecasts in recent weeks. Deutsche Bank strategists, led by Binky Chadha, noted that the tariff drag on corporate earnings is now estimated at ‘one-third’ of their prior projection, reflecting a more favorable outlook.

The new target represents a 10.35% increase over the S&P 500’s last close of 5,935.94, following a robust May performance – the index’s strongest monthly gain since November 2023 – driven by strong corporate earnings, easing inflation, and President Trump’s softer tariff stance. However, the European brokerage cautioned that the rally may face volatility, with potential pullbacks tied to fluctuating trade policy tensions. Deutsche Bank also raised its S&P 500 earnings per share estimate to $267 from $240, underscoring expectations of sustained corporate profitability. Despite the upbeat forecast, the brokerage highlighted risks of sharp market corrections driven by cycles of trade policy escalation and de-escalation, emphasizing the need for investors to remain vigilant in navigating these uncertainties.

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