BMO Capital Markets initiated its S&P 500 2026 year-end target at 7,380 Friday, citing global monetary and fiscal stimulus that should be supportive for equity prices.

BMO's 7,380 target is about 8.6% higher than the index's 6,798.40 close on Thursday.

The target is BMO's first from Francois Trahan, who took over as chief investment strategist at BMO earlier this year.

"Our read of things is that there is enough stimulus in the system to revive the U.S. economy despite all the longer-term challenges it's facing: deteriorating demographics, an affordability crisis, an unsustainable amount of debt, and the list goes on," Trahan writes in a note.

Trahan added: that it is a "better cyclical backdrop" for economic activity.

As such, BMO is "overweight" the industrials, energy and financial sectors and "neutral" on technology.