Can Stocks Keep Rising This Year? Here’s the One Reason This Expert Says Yes

Can the S&P 500 post another year of double-digit returns? If it does, one market expert says, it’ll earn it.

Some have warned that U.S. stocks can’t post outsize gains forever. After a decade of posting exceptional performance, helped by a strong dollar and valuation expansion, the S&P 500’s winning streak seems likely to stop or, at least, come under pressure—especially if big rate cuts aren’t in the offing. But some analysts think the index has at least another good year in it.

The reason? Strong growth in corporate earnings. Lori Calvasina, RBC Capital Markets’ head of U.S. equity strategy, sees the S&P 500 hitting 7750 in the next 12 months, implying upside of a little more than 11% from recent levels. At the end of 2025 that figure was 13%, she said, aligning with consensus earnings growth expectations at the time.

“We’re not looking for multiple expansion. We’re not looking for a big decline in the multiple,” Calvasina told CNBC Thursday. “We think this market is going to get what it deserves, but from an earnings perspective.”

RBC’s price target, which the firm updates monthly, is underpinned by its assessment of investor sentiment; valuation and earnings per share; stocks’ appeal relative to bonds; the macroeconomic backdrop; and monetary policy.

Signals from the current earnings season appear to shore up that forecast. Analysts have been more optimistic than usual in their earnings outlooks for the fourth quarter of 2025, raising their estimates over the course of those three months as opposed to lowering them. That’s “a rare thing,” FactSet’s John Butters said in an interview with financial media show MRKT Call yesterday.

The estimated growth rate for the fourth quarter has risen to 8.1% from 7.2% at the end of September, he said.

The tech sector saw the biggest jump in earnings per share revisions, Butters said, with some of the Magnificent Seven—such as Nvidia (NVDA), Microsoft (MSFT), and Apple (AAPL)—driving those upward changes.

DataTrek’s Nicholas Colas and Jessica Rabe said the only times over which analysts raised their quarterly estimates higher during a reporting period was in the first three quarters of 2021, and in the last two of last year. Because analysts tend to lower, rather than hike, their estimates, “this makes the last two quarters somewhat remarkable, and in our view supportive of current high S&P 500 valuations,” they wrote earlier this week.