For skeptics waiting for Corporate America’s growth engine to stall out, there’s still fuel in the tank, according to sell-side analysts, whose aggregated bottom-up price targets suggest the pace of income growth in the

S&P 500 index

will accelerate each year through 2027, data compiled by Jefferies show. That would translate into three consecutive years of double-digit earnings expansion, a rare development that has historically coincided with above-average returns in the S&P 500.

A lot needs to go right on the monetary and geopolitical fronts for the forecast to come to fruition. And still, the estimate depicts a sense of confidence among

Wall Street

researchers that a key pillar of support for the three-year

stock market bull run

, corporate earnings strength, remains intact despite worries that positioning has become stretched and valuations elevated.

“Earnings growth is not only expected to maintain its current trajectory above the long-term historical average but may also be taking another leg higher,” said Andrew Greenebaum, senior vice-president of U.S. equity product management at Jefferies. “Add that to the fact that fundamentals continue to look directionally supportive of U.S. equities broadly.”

With fourth-quarter earnings season about four weeks away, analysts expect S&P 500 companies to post an 8.3 per cent profit growth, data compiled by Bloomberg Intelligence show. That would push the full-year figure to 12 per cent, according to BI.

For next year, estimates have climbed five per cent from the peak of tariff-related uncertainty to US$310 per share, implying a 13 per cent year-over-year earnings growth. The figure is expected to rise to 14 per cent in 2027.

In the past 35 years, there have only been two other instances when the S&P 500 posted double-digit earnings growth for three straight years: in 1993-1995 and 2003-2005. Each time, the benchmark equities gauge clocked a 13 per cent yearly return, beating its multi-year average of 10 per cent.

The information technology, materials and industrials sectors are forecast to post the highest year-over-year earnings growth in 2026, data compiled by BI show. Consumer staples stocks, often known for their defensive characteristics, are expected to post profit expansion that trails the broader market.

Sell-side analysts covering S&P 500 stocks are not known for being skeptics, so their expectations may already be stretched.

“The earnings picture is definitely strong, but when expectations are that elevated, we typically see some volatility if results don’t meet forecasts,” said Michael Casper of Bloomberg Intelligence.

Uncertainty about the pace of

Federal Reserve

interest-rate cuts lingers, and the full impact of U.S. President Donald Trump’s tariffs is yet to filter through the economy.

To some on Wall Street, a reason for optimism is coming from a pickup in profit expansion outside the small group of tech megacaps that have driven much of this rally. A version of the S&P 500 that excludes the so-called

Magnificent Seven

companies is estimated to post 13 per cent earnings growth in 2026, not far below the 18 per cent reading expected for the seven high-flyers. Optimism over fiscal and monetary stimulus may help as well.

“The backdrop is positive for risk assets,” wrote Manish Kabra, head of U.S. equity strategy at Societe Generale, who expects the S&P 500 to reach 7,300 next year, and favors sectors such as industrials, utilities and financials. “It’s too early to call the bull run over.”

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Bloomberg.com