Evercore strategists back dour S&P 500 view, expect weaker earnings outlook
Reuters
Published Apr 15, 2024 11:47AM ET
By Lewis Krauskopf
NEW YORK (Reuters) - U.S. earnings estimates are likely to weaken as companies issue cautious outlooks, according to Evercore ISI strategists, who stood by their view the S&P 500 will end the year well lower than current levels.
As first-quarter reporting season gets underway, 30 S&P 500 companies have posted results so far with a 6% earnings beat, according to BofA Global Research. Stocks slumped on Friday following results from several major banks, the first big day of the quarterly reporting season.
The S&P 500 through Friday had advanced 7.4% this year, and the stability in 2024 earnings estimates has been a supportive factor for stocks, Evercore equity and derivatives strategists led by Julian Emanuel said in a note.
But that is "unlikely to persist," the strategists said.
"We believe the corporate outlooks will be more guarded, and EPS revised lower," Evercore said in a research note on Sunday.
The strategists reiterated their year-end target for the S&P 500 of 4,750, about 7% below Friday's close of 5,123.41 for the benchmark index.
Current consensus estimates for earnings are optimistic even for a “no landing” economic scenario, Evercore said.
The strategists said they were defensively positioned, including "outperform" ratings on the consumer staples, healthcare and communication services sectors, as they anticipate "intensifying volatility."
Evercore's dour outlook comes while other strategists have boosted their S&P 500 targets in recent weeks as stocks have gotten off to a strong start this year.
The Wells Fargo Investment Institute on Monday raised their year-end S&P 500 forecast to a range of 5,100-5,300, up from 4,800-5,000 previously. WFII's strategists also lifted their targets for S&P 500 earnings and U.S. economic growth in 2024.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.