Savita Subramanian, head of US Equity Strategy at Bank of America Securities, stated that BofA maintains a 7,100 year-end price target for the S&P 500 and holds a bearish view at the index level. Subramanian explained that the positive factors driving market gains have already been reflected in current valuations, citing a fundamental shift in supply-demand dynamics. The outlook follows 2025, which Subramanian described as "essentially the best year on record when it comes to liquidity," with simultaneous buying from individual investors, corporate buybacks, privatizations, and government entities — a pattern not repeating in 2026.
BofA Sets 7,100 Year-End S&P 500 Target With Bearish Index Outlook
Appearing on CNBC's Power Lunch, Subramanian stated that Bank of America Securities holds a 7,100 year-end price target for the S&P 500 and remains bearish at the index level. She noted that broad market gains will be difficult to sustain from current levels.
Subramanian stated: "The good news is priced in. Typically years where you've got great earnings growth and GDP growth are not the best years for equity returns. We are getting a big shift in supply demand. So that's why we're bearish at an index level."
Liquidity Dynamics Shift From 2025 Record Levels
Subramanian characterized 2025 as "essentially the best year on record when it comes to liquidity," with individual investors, corporate buybacks, privatizations, and government entities all buying U.S. equities simultaneously. She stated that this dynamic is not repeating in 2026.
Subramanian also questioned how much more earnings can surprise, noting that analysts are now forecasting near-record long-term earnings growth rates with strong earnings already anticipated.
Subramanian Recommends Russell Large Cap Value Index and Income-Generating Sectors
Subramanian identified the Russell Large Cap Value Index as the best single-index buy, pointing to its income-generating profile. Within the broader market, she sees opportunity in value and cyclical names but warned that the tailwinds that drove last year's gains have largely faded.
According to Subramanian: "Within the index, I think there's a tremendous opportunity to own income value areas of the market that are throwing off capital rather than using it."
FAQ
What is Bank of America's year-end price target for the S&P 500?
Bank of America Securities holds a 7,100 year-end price target for the S&P 500, as stated by Savita Subramanian, head of US Equity Strategy.
Why is BofA bearish on the broader stock market?
Subramanian explained that positive news is already priced into current valuations, and there is a significant shift in supply-demand dynamics. She noted that 2025's record liquidity conditions — with simultaneous buying from individual investors, corporate buybacks, privatizations, and government entities — are not repeating in 2026.
Which index does Savita Subramanian recommend as the best buy?
Subramanian identified the Russell Large Cap Value Index as the best single-index buy, citing its income-generating profile and opportunities in value and cyclical sectors that generate capital rather than consume it.
