Originally Published: December 11, 2025
“We consistently err in relying on bad forecasts to make judgements about the future, with the biggest error being our belief we could make accurate forecasts to begin with.” – Dan Rasmussen, author of The Humble Investor
Christmas music, Amazon packages, family gatherings, ugly sweaters, cocktail parties, represent the beautiful chaos of the holidays. It also means our 9th edition of “Tis the Season for Wall Street Forecasting” series!
It’s one of my favorite times of the year and the blog I look most forward to writing.
We cover how Wall Street did with their 2025 S&P 500 price predictions (decent given their horrendous track record) and what our confident friends are saying about 2026.
Let’s see how Wall Street’s 2025 forecasts compared to what actually happened.
These predictions were made in December 2024.
Aggregate Wall Street 2025 S&P 500 price target: 6,520
Actual S&P 500 index level (as of 12/9/25): 6,857
Wall Street only missed by ~5% in 2025. This is the best they’ve done over the past nine years (and it’s not even close). This is coming off a dismal year in 2024; Wall Street missed by a whopping 26.3%!
We can’t give too much credit though; when you dig into the actual commentary on how 2025 would play out, they were wildly off. In short, they were accurate in their end forecast, but wrong on how we got here. This is the equivalent of passing an exam by guessing ‘C’ on every question.
If you’re keeping score at home…
The most accurate forecast came from DataTrek Research with an S&P 500 price target of 6,840.
The most inaccurate forecast (once again) came from BCA Research with an S&P 500 price target of 4,450.
Here’s what Wall Street is predicting for 2026 S&P 500 price levels (from most optimistic to pessimistic)…
- Oppenheimer 8,100
- Yardeni Research 8,000
- Deutsche Bank 8,000
- Morgan Stanley 7,800
- UBS 7,600
- Goldman Sachs 7,600
- J.P. Morgan 7,500
- Barclays 7,500
- Center for Financial Research & Analysis (CFRA) 7,400
- Societe Generale 7,300
- Wells Fargo 7,200
- Bank of America 7,100
- RBC 7,100
- Ned Davis Research 7,100
- Citi ~7,000
The above graph shows the S&P 500’s price journey since 2024 (blue line) and various Wall Street estimates for 2026. It’s a bit unsettling for Wall Street to agree the journey in 2026 is going to be a smooth ride.
The simple average of the above forecasts for the S&P 500 price level for 2026 is 7,486, which equates to a ~9% price return from current levels (not including dividends).
The most pessimistic forecast comes from Citi Group which calls for a price return of ~2% for the S&P 500 in 2026.
The most optimistic forecast comes from Oppenheimer which calls for a return of 18% for the S&P 500 in 2026.
Most every Wall Street firm predicts double digit S&P 500 price appreciation in 2026. To quote the great investor Bob Farrell, “When everyone agrees, something else happens.”
The experts are essentially shrugging off nosebleed valuations and assume the AI narrative remains intact for at least another year. They could be right, but such groupthink is a bit too neat and tidy in our opinion.
What’s the big issue with forecasting?
A few things come to mind…
- There’s no penalty for being wrong. Banks, analysts, and the guy on financial TikTok can say whatever they want. If by chance they are correct, they are lauded as an oracle, and investors will hang on their every word. Never mind that most are perpetually wrong year after year.
- Absurd, wild forecasts get the most attention. In the digital age, everyone has a microphone. People are competing for opens, clicks, and attention to monetize their content across the internet. This incentivizes outlandish forecasts that are great for generating attention but aren’t actionable investment guidance.
- Investors that find forecasts credible are relying on a framework that has proven not to work. If you find yourself making predictions or seeking them out, it’s only a matter of time before you make a catastrophic mistake.
My advice is not to ignore Wall Street forecasts, market research, or commentary. Rather, take it with a grain of salt. Think of it as entertainment or an intellectually stimulating exercise. If a financial advisor tells you what happens next or positions your investments based on predictions, run the other way.
In our opinion, investors that know what to pay attention to in the digital age have a huge advantage.
Have a question or comment? Shoot us a note at [email protected].
