Gunning for higher annual earnings growth, Bank of America Merrill Lynch (NYSE:BAC) upped its 2013 target for the S&P 500 Index to 1,750 from 1,600 on Monday.

The index closed Friday at a record high of 1,680.19, inching past the initial 1,600 target, which was first surpassed in May.

Friday closed a third week of market gains, buoyed in part by higher-than-expected second-quarter earnings at JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC).

“While the decline in the equity risk premium has been more than twice what we expected, we think it is justified by diminished tail risks, positive surprises in the U.S. economy and, as expected, a continued decline in earnings volatility,” analysts at the bank wrote. “Thus, our new target is largely driven by our Fair Value model, where we lowered our year-end ERP forecast from 600 [basis points] to 475 [basis points], partially offset by a 50 [basis point] increase to the normalized real risk-free rate.”