Barclays axes end-of-year target for S&P 500
Chop chop.
Barclays US equity analysts cut their aggregate earnings estimates and year-end price target on the S&P 500 Wednesday, citing uncertainty and the likely hit to profitability posed by the Trump administration’s ongoing tariff bonanza. They wrote:
“Our revised YE25 S&P 500 price target of 5900 is based on 22.5x our base case EPS estimate of $262, and assumes that earnings take a hit but valuations gradually recover as some tariffs are put in place, stifling growth and modestly boosting inflation but ultimately stopping short of pushing the US into an outright recession.
As with our EPS estimates, our bull and bear case scenarios reflect significant uncertainties stemming from the muddled US tariff outlook. In our bull case, easing trade tensions allow growth to get back on track and for valuations to re-test t12m highs. In our bear case, the full impact of threatened tariffs push US growth materially lower — potentially below zero — and the SPX into a bear market selloff as valuations drop to previous cycle lows.”
While the general population seems to have abandoned hopes for the stock market in light of the recent correction, Wall Street analysts, as you might expect, have been slower to acknowledge diminished expectations for the market.
But some have been doing it. A recent Barron’s piece noted that last week, Citi analysts seemed to suggest they were looking for a year-end level of about 5,500, at the bottom of their previous range of results. Yardeni Research recently reduced its “best case” target to 6,400 from 7,000, saying it may have underestimated the impact of tariffs. And on March 11, Goldman Sachs officially cut its S&P 500 target to 6,200 from 6,500, citing the steep sell-off of Magnificent 7 momentum stocks like Nvidia, Tesla, and Google parent Alphabet.
On the other hand, the overall movement of targets has been de minimis, with the FactSet consensus target price — a so-called bottom-up created by aggregating and weighting price targets for individual stocks — is still at about 6,920.
That implies a gain of over 20% from where the S&P is trading right now (near 5,710), which would require a pretty impressive rally for the remaining three quarters of the year.
