Citi U.S. fairness strategists are rising extra constructive on shares as they imagine earnings will likely be extra resilient relative to prior recessions.
Because of this, they reiterated their S&P 500 targets: 3700 (mid-year) and 4000 (year-end). Citi urges traders to purchase under the previous and promote above the latter.
“This can be probably the most broadly anticipated recession in latest reminiscence,” the strategists wrote of their outlook replace be aware.
These value targets are based mostly on Citi’s base case that initiatives a light recession, a situation to which a 65% risk is assigned. A soft-landing situation (20% likelihood) might see the S&P 500 end the yr at 4500 whereas a tough touchdown (15%) might push all of it the way in which to 3200.
The strategists additionally lowered the S&P 500 earnings estimate for 2023 to $213 from $216 on gentle recession. Additionally they add {that a} consensus of 12% earnings development in 2024 could also be unrealistic. As a substitute, they anticipate the S&P 500 earnings to develop 6% subsequent yr.
The S&P 500 closed at $3,960.28 yesterday.
Supply: Reuters
