<div id="readability-page-1">After posting a 16% gain last year, the S&amp;P 500 capped off its third straight year of double-digit returns. But can 2026 deliver another solid year for equities, or is the market due for a cooldown?<h3>Claim 70% Off TipRanks Premium</h3><ul><li>Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions </li><li> Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential</li></ul> That's the debate taking shape on Wall Street – and according to Raymond James Chief Investment Officer Larry Adam, the pace of gains may begin to slow. &#34;Valuations for the S&amp;P 500 have climbed to the 95th percentile, meaning price-to-earnings multiple expansion has little more to give,&#34; Adam opined. &#34;Returns will need to rely squarely on earnings growth. The good news? We expect earnings to rise about 12%, supporting our year-end S&amp;P 500 target of 7,250. That means the return profile shifts from double-digit gains to mid-single digits. That said, conditions remain favorable: solid economic growth, an easing Fed, stable long-term rates, and healthy buybacks and dividends. Compared to recent years, however, you'll want to keep expectations in check for equity returns.&#34; For investors aiming to go beyond that baseline and hunt for outsized upside, the Raymond James analysts have pinpointed two stocks they believe could meaningfully outperform the market in 2026. Both are rated as Strong Buys by the firm, and to put those convictions in context, we turned to the TipRanks database to see how the broader Street stacks up behind the calls. Let's dive in. Darling Ingredients (DAR) Up first on our radar is Darling Ingredients, a company that has multiple lines of business, including food tech, agribusiness, and waste recycling. Darling's core business is collecting the waste products of the animal husbandry, agriculture, and food industries and recycling them for use in a wide range of areas: as feedstock and food products, including animal feeds and human food additives, and as biofuels. Darling has split its business into three branches: feed, food, and fuel. The first of these includes fats and proteins that are essential nutritious animal feeds and are used in both livestock and pet foods. Darling also uses its feedstock fats in its biofuel program. The company boasts that its rendering business is the largest in the world. On the food side, Darling is a world leader in making and distributing collagens and gelatins. These products are produced in an international network of 16 factories. The gelatins have a vital role in the food industry as stabilizers, clarifiers, and thickeners, while the collagens are used in the health and wellness sectors. Last month, Darling signed a definitive agreement with Belgium-based Tessenderlo, an industrial company with a strong footprint in the same feed and feedstock fields where Darling works. The two companies will combine their collagen and gelatin segments into a new firm to be called Nextida. Darling will hold an 85% stake in the new venture, which will not require a cash investment from either parent. The last segment of Darling's business, fuel, is home to the company's biodiesel, biogas, and aviation fuels. These fuels are mainly produced by recycling cooking oil and animal fats, with the biogas being generated from food waste and pig manure. Darling's fuel business is designed to produce a vital product from otherwise dangerous biological waste products. On the financial side, Darling last reported results for 3Q25. In that quarter, the company's top line came to $1.6 billion – a figure that beat the forecast by almost $62 million and was up 14% year-over-year. The company's bottom line, the 12-cent GAAP EPS, was 11 cents per share lower than expected. We should note that at the end of 3Q25, Darling had $91.5 million in available liquid assets, compared to $75.9 million at the end of December 2024. This stock has caught the eye of Raymond James's Justin Jenkins, an analyst ranked among the top 1% on Wall Street, who lays out an upbeat take. The 5-star analyst writes, &#34;RD and related sustainable fuels represent a structural growth element for DAR and industry peers – with pivotal regulatory catalysts (i.e., RVO finalization, SREs, Producer tax credits/45z) in the pipeline that can further solidify our positive outlook. This is all while DAR's core 'upstream' operations remain a steady cash flow generator, and the stock price is nearing a point where the DGD JV stake is a call option value. All told, we think the business is at/near a trough for fundamentals and sentiment, and expect a solid recovery in earnings and the trading multiple… especially into 2026+.&#34; Jenkins gives DAR a Strong Buy rating, with a $60 price target that implies a 53.5% gain in the coming months. (To watch Jenkins' track record, click here) The 9 recent analyst reviews here are unanimous, for a Strong Buy consensus rating. The stock's $39.08 trading price and $48.89 average target price together indicate a 25% gain in store on the one-year timeframe. (See DAR stock forecast)</div>

Raymond James predicts that S&P 500 gains may slow in 2026, with a target of 7,250, relying on earnings growth rather than price-to-earnings expansion. Despite this, favorable conditions like economic growth and stable rates persist. The firm identifies Darling Ingredients (DAR) as a potential outperformer, highlighting its diverse business in food tech and waste recycling. DAR's recent performance showed a 14% year-over-year revenue increase, and analysts expect a recovery in earnings and stock value, with a Strong Buy rating and a $60 price target from Raymond James.

S&P 500 Gains May Slow in 2026 — but Raymond James Says These 2 Stocks Could Beat the Market